Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 18, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 1-11846 | ||
Entity Registrant Name | APTARGROUP INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-3853103 | ||
Entity Address, Address Line One | DELAWARE | ||
Entity Address, City or Town | CRYSTAL LAKE | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60014 | ||
City Area Code | 815 | ||
Local Phone Number | 477-0424 | ||
Title of 12(b) Security | Common Stock, $.01 par value | ||
Trading Symbol | ATR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 64,054,138 | ||
Entity Public Float | $ 7,975,902,822 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000896622 | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||
Net sales | $ 2,859,732 | $ 2,764,761 | $ 2,469,283 |
Operating Expenses: | |||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,818,398 | 1,812,961 | 1,603,070 |
Selling, research & development and administrative | 454,617 | 429,955 | 387,424 |
Depreciation and amortization | 194,552 | 171,747 | 153,094 |
Restructuring initiatives | 20,472 | 63,829 | 2,208 |
Total Operating Expenses | 2,488,039 | 2,478,492 | 2,145,796 |
Operating Income | 371,693 | 286,269 | 323,487 |
Other (Expense) Income: | |||
Interest expense | (35,489) | (32,626) | (40,597) |
Interest income | 4,174 | 7,056 | 5,470 |
Equity in results of affiliates | 135 | (229) | (229) |
Miscellaneous, net | 1,556 | 5,550 | 6,694 |
Total Other Income (Expense) | (29,624) | (20,249) | (28,662) |
Income before Income Taxes | 342,069 | 266,020 | 294,825 |
Provision for Income Taxes | 99,842 | 71,254 | 74,796 |
Net Income | 242,227 | 194,766 | 220,029 |
Net (Income) Loss Attributable to Noncontrolling Interests | (25) | (21) | 1 |
Net Income Attributable to AptarGroup, Inc. | $ 242,202 | $ 194,745 | $ 220,030 |
Net Income Attributable to AptarGroup, Inc. Per Common Share: | |||
Basic (in dollars per share) | $ 3.81 | $ 3.12 | $ 3.52 |
Diluted (in dollars per share) | $ 3.66 | $ 3 | $ 3.41 |
Average number of shares outstanding: | |||
Basic (in shares) | 63,574 | 62,437 | 62,435 |
Diluted (in shares) | 66,150 | 64,958 | 64,596 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net Income | $ 242,227 | $ 194,766 | $ 220,029 |
Other Comprehensive Income (Loss): | |||
Foreign currency translation adjustments | (8,727) | (62,914) | 74,404 |
Changes in treasury locks, net of tax | 17 | 28 | |
Gain (loss) on derivatives, net of tax | (37) | 1,547 | (3,186) |
Defined benefit pension plan, net of tax | |||
Actuarial gain / (loss), net of tax | (25,877) | 5,292 | (7,906) |
Prior service cost, net of tax | 320 | (26) | (1,038) |
Amortization of prior service cost included in net income, net of tax | 2,541 | 533 | 296 |
Amortization of net loss included in net income, net of tax | 332 | 4,991 | 3,828 |
Total defined benefit pension plan, net of tax | (22,684) | 10,790 | (4,820) |
Total other comprehensive income (loss) | (31,448) | (50,560) | 66,426 |
Comprehensive Income | 210,779 | 144,206 | 286,455 |
Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 21 | 16 | (18) |
Comprehensive Income Attributable to AptarGroup, Inc. | $ 210,800 | $ 144,222 | $ 286,437 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and equivalents | $ 241,970 | $ 261,823 |
Accounts and notes receivable, less allowance for doubtful accounts of $3,626 in 2019 and $3,541 in 2018 | 558,428 | 569,630 |
Inventories | 375,795 | 381,110 |
Prepaid and other | 115,048 | 118,245 |
Total Current Assets | 1,291,241 | 1,330,808 |
Property, Plant and Equipment: | ||
Buildings and improvements | 504,328 | 453,572 |
Machinery and equipment | 2,521,737 | 2,368,332 |
Property, Plant and Equipment, Gross | 3,026,065 | 2,821,904 |
Less: Accumulated depreciation | (1,963,520) | (1,855,810) |
Property, Plant and Equipment, Net | 1,062,545 | 966,094 |
Land | 25,133 | 25,519 |
Total Property, Plant and Equipment | 1,087,678 | 991,613 |
Other Assets: | ||
Investments in equity securities | 8,396 | 25,448 |
Goodwill | 763,461 | 712,095 |
Intangible assets | 291,084 | 254,904 |
Operating lease right-of-use assets | 72,377 | |
Miscellaneous | 47,882 | 62,867 |
Total Other Assets | 1,183,200 | 1,055,314 |
Total Assets | 3,562,119 | 3,377,735 |
Current Liabilities: | ||
Notes payable, revolving credit facility and overdrafts | 44,259 | 101,293 |
Current maturities of long-term obligations, net of unamortized debt issuance costs | 65,988 | 62,678 |
Accounts payable, accrued and other liabilities | 573,028 | 525,199 |
Total Current Liabilities | 683,275 | 689,170 |
Long-term obligations, net of unamortized debt issuance costs | 1,085,453 | 1,125,993 |
Deferred Liabilities and Other: | ||
Deferred income taxes | 41,388 | 53,917 |
Retirement and deferred compensation plans | 101,225 | 62,319 |
Operating lease liabilities | 55,276 | |
Deferred and other non-current liabilities | 23,250 | 23,465 |
Commitments and contingencies | ||
Total Deferred Liabilities and Other | 221,139 | 139,701 |
AptarGroup, Inc. stockholders' equity | ||
Common stock, $.01 par value, 199 million shares authorized, 68.6 and 67.3 million shares issued as of December 31, 2019 and 2018, respectively | 686 | 673 |
Capital in excess of par value | 770,596 | 678,769 |
Retained earnings | 1,523,820 | 1,371,826 |
Accumulated other comprehensive (loss) | (341,948) | (310,504) |
Less treasury stock at cost, 4.8 and 4.4 million shares as of December 31, 2019 and 2018, respectively | (381,238) | (318,208) |
Total AptarGroup, Inc. Stockholders' Equity | 1,571,916 | 1,422,556 |
Noncontrolling interests in subsidiaries | 336 | 315 |
Total Stockholders' Equity | 1,572,252 | 1,422,871 |
Total Liabilities and Stockholders' Equity | $ 3,562,119 | $ 3,377,735 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands, shares in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 3,626 | $ 3,541 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 199 | 199 |
Common stock, shares issued | 68.6 | 67.3 |
Treasury stock, shares | 4.8 | 4.4 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Common Stock Par Value | Treasury Stock | Capital in Excess of Par Value | Non-Controlling Interest | Total |
Balance at Dec. 31, 2016 | $ 1,197,234 | $ (319,709) | $ 660 | $ (250,917) | $ 546,682 | $ 292 | $ 1,174,242 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 220,030 | (1) | 220,029 | ||||
Foreign currency translation adjustments | 74,385 | 19 | 74,404 | ||||
Changes in unrecognized pension gains (losses) and related amortization, net of tax | (4,820) | (4,820) | |||||
Changes in treasury locks, net of tax | 28 | 28 | |||||
Changes in derivative gains (losses), net of tax | (3,186) | (3,186) | |||||
Stock awards and option exercises | 12 | 25,212 | 67,605 | 92,829 | |||
Cash dividends declared on common stock | (79,944) | (79,944) | |||||
Treasury stock purchased | (120,540) | (120,540) | |||||
Common stock repurchased and retired | (36,173) | (5) | (4,816) | (40,994) | |||
Balance at Dec. 31, 2017 | 1,301,147 | (253,302) | 667 | (346,245) | 609,471 | 310 | 1,312,048 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 194,745 | 21 | 194,766 | ||||
Adoption of accounting standards | Accounting Standards Update 2014-09 | 2,937 | 2,937 | |||||
Adoption of accounting standards | Accounting Standards Update 2018-02 | 6,658 | (6,658) | |||||
Foreign currency translation adjustments | (62,898) | (16) | (62,914) | ||||
Changes in unrecognized pension gains (losses) and related amortization, net of tax | 10,790 | 10,790 | |||||
Changes in treasury locks, net of tax | 17 | 17 | |||||
Changes in derivative gains (losses), net of tax | 1,547 | 1,547 | |||||
Stock awards and option exercises | 12 | 31,942 | 75,763 | 107,717 | |||
Cash dividends declared on common stock | (82,346) | (82,346) | |||||
Treasury stock purchased | (3,905) | (3,905) | |||||
Common stock repurchased and retired | (51,315) | (6) | (6,465) | (57,786) | |||
Balance at Dec. 31, 2018 | 1,371,826 | (310,504) | 673 | (318,208) | 678,769 | 315 | 1,422,871 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 242,202 | 25 | 242,227 | ||||
Foreign currency translation adjustments | (8,723) | (4) | (8,727) | ||||
Changes in unrecognized pension gains (losses) and related amortization, net of tax | (22,684) | (22,684) | |||||
Changes in derivative gains (losses), net of tax | (37) | (37) | |||||
Stock awards and option exercises | 13 | 23,467 | 91,827 | 115,307 | |||
Cash dividends declared on common stock | (90,208) | (90,208) | |||||
Treasury stock purchased | (86,497) | (86,497) | |||||
Balance at Dec. 31, 2019 | $ 1,523,820 | $ (341,948) | $ 686 | $ (381,238) | $ 770,596 | $ 336 | $ 1,572,252 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities: | |||
Net income | $ 242,227 | $ 194,766 | $ 220,029 |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation | 166,944 | 156,292 | 142,755 |
Amortization | 27,608 | 15,455 | 10,339 |
Stock based compensation | 23,893 | 19,561 | 18,924 |
Provision for (recovery of) doubtful accounts | 782 | 923 | 235 |
(Gain) loss on disposition of fixed assets | 344 | (770) | 387 |
Gain on remeasurement of equity securities | (6,500) | ||
Debt prepayment costs | 4,710 | ||
Deferred income taxes | 8,746 | (23,352) | 2,238 |
Defined benefit plan expense | 15,342 | 19,501 | 17,200 |
Equity in results of affiliates | (135) | 229 | 229 |
Changes in balance sheet items, excluding effects from acquisitions and foreign currency adjustments: | |||
Accounts receivables | 8,811 | (66,968) | (44,658) |
Inventories | 605 | (25,183) | (12,989) |
Prepaid and other current assets | 6,596 | (9,437) | (33,959) |
Accounts payable, accrued and other liabilities | (779) | 37,155 | 58,245 |
Income taxes payable | 5,658 | (3,155) | (8,753) |
Retirement and deferred compensation plan liabilities | (3,956) | (22,762) | (41,004) |
Other changes, net | 11,771 | 27,873 | (9,199) |
Net Cash Provided by Operations | 514,457 | 313,628 | 324,729 |
Cash Flows from Investing Activities: | |||
Capital expenditures | (242,276) | (211,252) | (156,624) |
Proceeds from sale of property, plant and equipment | 4,301 | 4,466 | 2,036 |
Insurance proceeds | 10,631 | 709 | |
Settlement for derivative | (66,155) | ||
Acquisition of business, net of cash acquired | (106,328) | (527,916) | |
Acquisition of intangible assets | (4,806) | (611) | |
Investment in equity securities | (3,530) | (10,000) | (5,000) |
Proceeds from sale of investment in equity securities | 16,487 | ||
Notes receivable, net | (116) | (779) | 234 |
Net Cash Used by Investing Activities | (336,268) | (735,461) | (224,800) |
Cash Flows from Financing Activities: | |||
Proceeds from notes payable and overdrafts | 50,854 | 49,069 | |
Repayments of notes payable and overdrafts | (53,269) | (29,994) | |
Proceeds and repayments of short term credit facility, net | (52,096) | 81,063 | (169,213) |
Proceeds from long-term obligations | 10,523 | 13,161 | 625,628 |
Repayments of long-term obligations | (67,276) | (72,290) | (165,798) |
Dividends paid | (90,208) | (82,346) | (79,944) |
Credit facility costs | (3,542) | ||
Debt prepayment costs | (4,710) | ||
Proceeds from stock option exercises | 90,834 | 88,156 | 73,905 |
Purchase of treasury stock | (86,497) | (3,905) | (120,540) |
Common stock repurchased and retired | (57,786) | (40,994) | |
Net Cash Provided (Used) by Financing Activities | (197,135) | (14,872) | 114,792 |
Effect of Exchange Rate Changes on Cash | (904) | (9,112) | 31,632 |
Net Increase (Decrease) in Cash and Equivalents and Restricted Cash | (19,850) | (445,817) | 246,353 |
Cash and Equivalents and Restricted Cash at Beginning of Period | 266,823 | 712,640 | 466,287 |
Cash and Equivalents and Restricted Cash at End of Period | 246,973 | 266,823 | 712,640 |
Supplemental Cash Flow Disclosure: | |||
Interest paid | 34,422 | 32,005 | 38,838 |
Income taxes paid | $ 86,097 | $ 96,048 | $ 77,349 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted cash included in the line item prepaid and other on the Condensed Consolidated Balance Sheets as shown below represents amounts held in escrow. | ||||
Cash and equivalents | $ 241,970 | $ 261,823 | $ 712,640 | |
Restricted cash included in prepaid and other | 5,003 | 5,000 | ||
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows | $ 246,973 | $ 266,823 | $ 712,640 | $ 466,287 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation. AptarGroup’s organizational structure consists of three market-focused business segments which are Beauty + Home, Pharma and Food + Beverage. This is a strategic structure which allows us to be more closely aligned with our customers and the markets in which they operate. In late 2017, Aptar began a business transformation plan to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness (see Note 21 – Restructuring Initiatives for further details). The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also addressed. During 2019, 2018 and 2017, we recognized approximately $20.5 million, $63.8 million and $2.2 million, respectively, of restructuring costs related to this plan. During the quarter ended June 30, 2018, primarily based on published estimates which indicate that Argentina's three-year cumulative inflation rate has exceeded 100%, we concluded that Argentina has become a highly inflationary economy. Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiaries. We have changed the functional currency from the Argentinian peso to the U.S. dollar. Local currency monetary assets and liabilities were remeasured into U.S. dollars using exchange rates as of the latest balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in net earnings. During the last half of 2018, we recognized approximately $0.8 million of currency gains due to these changes. Our Argentinian operations contributed approximately less than 2.0% of consolidated net assets and revenues at and for the year ended December 31, 2019. ACCOUNTING ESTIMATES The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS We consider all investments that are readily convertible to known amounts of cash with an original maturity of three months or less when purchased to be cash equivalents. INVENTORIES Inventories are stated at lower of cost or net realizable value. Costs included in inventories are raw materials, direct labor and manufacturing overhead. INVESTMENTS IN EQUITY SECURITIES We account for our 20% to 50% owned investments using the equity method. Equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value. Any related changes in fair value is recognized in net income unless the investments qualify for a practicality exception. In May 2018, we invested $10.0 million in preferred equity stock of Reciprocal Labs Corporation, doing business as Propeller Health. During 2018, we increased the value of this investment by approximately $6.5 million due to fair value inputs. This investment was ultimately sold during January 2019 for an amount of $16.5 million (see Note 20 – Acquisitions for further details). During August 2019, we also invested an aggregate amount of $3.5 million in two preferred equity investments that are accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. There were no indications of impairment nor were there any changes from observable price changes noted for the year ended December 31, 2019. There were no dividends received from affiliated companies in 2019, 2018 and 2017. PROPERTY AND DEPRECIATION Properties are stated at cost. Depreciation is determined on a straight-line basis over the estimated useful lives for financial reporting purposes and accelerated methods for income tax reporting. Generally, the estimated useful lives are 10 to 40 years for buildings and improvements and 3 to 15 years for machinery and equipment. FINITE-LIVED INTANGIBLE ASSETS Finite-lived intangibles, consisting of patents, acquired technology, customer relationships, trademarks and trade names and license agreements acquired in purchase transactions, are capitalized and amortized over their useful lives which range from 1 to 20 years. GOODWILL The Company has historically evaluated the excess of purchase price over the fair value of the net assets acquired (“goodwill”) for impairment annually as of December 31 or more frequently if impairment indicators arose in accordance with Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other.” In the fourth quarter of 2019, the Company changed the date of its annual assessment of goodwill to October 1 for all reporting units. The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as the new date of the assessment better aligns with the Company’s budgeting process and will create a more efficient and timely process surrounding the impairment tests. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge. The Company has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each October 1 of prior reporting periods without the use of hindsight. As such, the Company prospectively applied the change in annual goodwill impairment testing date from October 1, 2019. We believe that the accounting estimates related to determining the fair value of our reporting units is a critical accounting estimate because: (1) it is highly susceptible to change from period to period because it requires management to make assumptions about the future cash flows for each reporting unit over several years, and (2) the impact that recognizing an impairment would have on the assets reported on our balance sheet as well as our results of operations could be material. Management’s determination of the fair value of our reporting units, based on future cash flows for the reporting units, requires significant judgment and the use of estimates and assumptions related to projected revenue growth rates, the terminal growth factor, as well as the discount rate. Actual cash flows in the future may differ significantly from those forecasted today. The estimates and assumptions for future cash flows and its impact on the impairment testing of goodwill is a critical accounting estimate. Management believes goodwill in purchase transactions has continuing value. Goodwill is not amortized and must be tested annually, or more frequently as circumstances dictate, for impairment. The annual goodwill impairment test may first consider qualitative factors to determine whether it is more likely than not (i.e., greater than 50 percent chance) that the fair value of a reporting unit is less than its book value. This is sometimes referred to as the “step zero” approach and is an optional step in the annual goodwill impairment analysis. Management has performed this qualitative assessment as of October 1, 2019 for each of our reporting units. Based on our review of macroeconomic, industry, and market events and circumstances as well as the overall financial performance of the reporting units, we determined that it was more likely than not that the fair value of these reporting units was greater than their carrying amounts. During the third quarter of 2019, we performed a separate quantitative impairment assessment using a discounted cash flow analysis of the Active Packaging reporting unit, which was formed as a result of the CSP Technologies Acquisition in the third quarter of 2018. We calculated the fair value of the Active Packaging reporting unit and compared it with the associated carrying value (the “step one” approach) as of July 1, 2019. Based on this quantitative analysis, the fair value of the reporting unit exceeded the carrying value and therefore no impairment loss was recognized. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and finite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES Derivative financial instruments are recorded in the Consolidated Balance Sheets at fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded in each period in earnings or other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction. RETIREMENT OF COMMON STOCK During 2019, we repurchased 779 thousand shares of common stock, all of which were returned to treasury stock. During 2018, we repurchased 668 thousand shares of common stock, of which 623 thousand shares were immediately retired. Common stock was reduced by the number of shares retired at $0.01 par value per share. We allocate the excess purchase price over par value between additional paid-in capital and retained earnings. RESEARCH & DEVELOPMENT EXPENSES Research and development costs, net of any customer funded research and development or government research and development credits, are expensed as incurred. These costs amounted to $82.8 million, $75.3 million and $68.2 million in 2019, 2018 and 2017, respectively. INCOME TAXES We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create timing differences between the tax basis of an asset or liability and its reported amount in the financial statements, an appropriate provision for deferred income taxes is made. All of our non-U.S. earnings are subject to U.S. taxation, either from the transition tax enacted in the U.S. by the Tax Cuts and Jobs Act (“TCJA”) on accumulated non-U.S. earnings as of the end of 2017 or the global intangible low-taxed income (“GILTI”) provisions on non-U.S. earnings thereafter. We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company. We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition. See Note 6 – Income Taxes for more information. TRANSLATION OF FOREIGN CURRENCIES The functional currencies of the majority of our foreign operations are the local currencies. Assets and liabilities of our foreign operations are translated into U.S. dollars at the rates of exchange on the balance sheet date. Sales and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are accumulated in a separate section of Stockholders’ Equity. Realized and unrealized foreign currency transaction gains and losses are reflected in income, as a component of miscellaneous income and expense, and represented losses of $1.7 million, $1.7 million and $5.0 million in 2019, 2018 and 2017, respectively. STOCK-BASED COMPENSATION Accounting standards require the application of the non-substantive vesting approach which means that an award is fully vested when the employee’s retention of the award is no longer contingent on providing future service. Under this approach, compensation costs are recognized over the requisite service period of the award instead of ratably over the vesting period stated in the grant. As such, costs are recognized immediately if the employee is retirement eligible on the date of grant or over the period from the date of grant until retirement eligibility if retirement eligibility is reached before the end of the vesting period stated in the grant. See Note 16 – Stock-Based Compensation for more information. REVENUE RECOGNITION At inception of customer contracts, we assess the goods and services promised in order to identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, we allocate the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied (i.e., when the customer obtains control of the good or service). The majority of our revenues are derived from product and tooling sales; however, we also receive revenues from service, license, exclusivity and royalty arrangements, which are considered insignificant. See specific discussions about methods of accounting for control transfers of product and tooling sales in Note 2 – Revenue. LEASES We determine if an arrangement is a lease at inception. Operating lease assets are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities are included in accounts payable accrued and other liabilities in our Consolidated Balance Sheets. Finance leases are included in property, plant and equipment, current maturities of long-term obligations and long-term obligations in our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made as well as initial direct costs incurred and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, we account for the lease and non-lease components as a single lease component. We have elected not to recognize right-of-use assets and lease liabilities that arise from short-term leases (a lease whose term is 12 months or less and does not include a purchase option that we are reasonably certain to exercise). Certain vehicle lease contracts include guaranteed residual value that is considered in the determination of lease classification. The probability of having to satisfy a residual value guarantee is not considered for the purpose of lease classification, but is considered when measuring a lease liability. ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification. In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases, as our accounting for finance leases remained substantially unchanged. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We adopted the standard on January 1, 2019 using a modified retrospective transition, with the effective date method. Under this method, financial results reported in periods prior to 2019 are not recast. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows companies to carry forward their historical lease classification. We also implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The impact of adoption of the standard to previously reported results is shown below. Balance at Balance at December 31, January 1, 2018 Adjustments 2019 Consolidated Balance Sheets Operating lease right-of-use assets $ — $ 83,222 $ 83,222 Prepaid and other 118,245 (1,383) 116,862 Property, plant and equipment 991,613 5,876 997,489 Current maturities of long-term obligations, net of unamortized debt issuance costs 62,678 2,631 65,309 Accounts payable, accrued and other liabilities 525,199 20,508 545,707 Operating lease liabilities — 61,331 61,331 Long-term obligations, net of unamortized debt issuance costs 1,125,993 3,245 1,129,238 In May 2014, the FASB issued ASU 2014-09, which amended the guidance for recognition of revenue from customer contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, we adopted this standard and all the related amendments (the “new revenue standard”) for all contracts. This adoption was accounted for using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the January 1, 2018 opening balance of retained earnings. Comparative information for the prior periods has not been restated and continues to be reported under the accounting standards in effect prior to January 1, 2018. Balance at Balance at December 31, 2017 Adjustment January 1, 2018 Consolidated Balance Sheets Assets Inventories $ 337,216 $ (7,064) $ 330,152 Prepaid and other 109,791 6,411 116,202 Liabilities Accounts payable, accrued and other liabilities 461,579 (5,706) 455,873 Deferred income taxes 20,995 1,292 22,287 Deferred and other non-current liabilities 5,608 824 6,432 Stockholders’ Equity Retained earnings 1,301,147 2,937 1,304,084 A majority of our sales revenue continues to be recognized when products are shipped from our manufacturing facilities. For certain custom product and tooling sales where revenue was previously recognized when the products were shipped, we now recognize revenue over the time required to manufacture the product or build the tool in accordance with the new revenue standard. We also have certain extended warranty contracts, which under the new standard are considered a separate performance obligation and are required to be deferred and recognized into revenue over the life of the agreement. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our consolidated statements of income and balance sheets is as follows: For the Year Ended December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Statements of Income Net Sales Beauty + Home $ 1,426,382 $ 1,424,701 $ 1,681 Pharma 954,652 954,497 155 Food + Beverage 383,727 385,001 (1,274) Costs and Expenses Cost of sales (exclusive of depreciation and amortization) 1,812,961 1,811,290 1,671 Provision for income taxes 71,254 71,541 (287) Net income 194,766 195,588 (822) December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Balance Sheets Assets Inventories $ 381,110 $ 391,315 $ (10,205) Prepaid and other 118,245 108,490 9,755 Liabilities Accounts payable, accrued and other liabilities 525,199 529,168 (3,969) Deferred income taxes 53,917 52,912 1,005 Deferred and other non-current liabilities 23,465 23,066 399 Stockholders’ Equity Retained earnings 1,371,826 1,369,711 2,115 In January 2016, the FASB issued ASU 2016-01, which provides guidance on the classification and measurement of financial assets and liabilities (equity securities and financial liabilities) under the fair value option and the presentation and disclosure requirements for financial instruments. In February 2018, ASU 2018-03 was issued to clarify certain aspects of the guidance issued in January 2016. The guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any related changes in fair value in net income unless the investments qualify for the new practicality exception. A measurement alternative exists for those equity investments that do not have a readily determinable fair value. These investments may be measured at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The standard also includes a new impairment model for equity investments without readily determinable fair values. The new model is a single-step model under which we are required to perform a qualitative assessment each reporting period to identify impairment. When a qualitative assessment indicates that an impairment exists, we will estimate the fair value of the investment and recognize in current earnings an impairment loss equal to the difference between the fair value and the carrying amount of the equity investment. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. We adopted the requirements of this standard during the first quarter of 2018. In November 2016, the FASB issued ASU 2016-18, which provides guidance to address the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments in this standard require that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. We adopted the requirements of this standard during the first quarter of 2018 and appropriate disclosures are included on the statement of cash flows to the extent applicable. In February 2018, the FASB issued ASU 2018-02, which provides guidance on the reclassification of certain tax effects from accumulated other comprehensive income. This guidance allows for the reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018. We elected to early adopt this standard in the fourth quarter of 2018. As part of this adoption, we elected to reclassify $6.7 million of stranded income tax effects of the TCJA from accumulated other comprehensive income to retained earnings at the beginning of the fourth quarter of 2018. Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our consolidated financial statements. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE. | |
REVENUE | NOTE 2 REVENUE Revenue by segment and geography for the years ended December 31, 2019 and 2018 is as follows: For the Year Ended December 31, 2019 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 792,255 $ 310,411 $ 160,048 $ 90,000 $ 1,352,714 Pharma 729,882 297,871 26,344 36,954 1,091,051 Food + Beverage 116,332 228,486 33,996 37,153 415,967 Total $ 1,638,469 $ 836,768 $ 220,388 $ 164,107 $ 2,859,732 For the Year Ended December 31, 2018 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 816,359 $ 334,881 $ 178,392 $ 96,750 $ 1,426,382 Pharma 696,079 196,928 25,485 36,160 954,652 Food + Beverage 115,040 194,527 31,742 42,418 383,727 Total $ 1,627,478 $ 726,336 $ 235,619 $ 175,328 $ 2,764,761 Aptar performs its obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. Aptar recognizes a contract asset when it transfers control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped and invoiced to the customer. Aptar recognizes a contract liability if the customer's payment of consideration precedes the entity's performance. The opening and closing balances of Aptar’s contract asset and contract liabilities are as follows: Balance as of Balance as of Increase/ December 31, 2018 December 31, 2019 (Decrease) (opening) (closing) Contract asset (current) $ 15,858 $ 16,245 $ 387 Contract asset (long-term) $ — $ — $ — Contract liability (current) $ 68,134 $ 79,305 $ 11,171 Contract liability (long-term) $ 11,261 $ 9,779 $ (1,482) The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of acquisitions and timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is $61.3 million, including $32.6 million relating to contract liabilities at the beginning of the year. Determining the Transaction Price In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), Aptar includes an estimate of the expected amount of consideration as revenue. Aptar applies the expected value method based on all of the information (historical, current and forecast) that is reasonably available and identifies reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which it will be entitled. Point in Time Performance Obligations For product and tooling sales considered to be point in time, Aptar typically assesses, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. For free on board (“FOB”) shipping point terms, revenue is recognized at the time of shipment. The performance obligation with respect to the sale of goods is satisfied at the time of shipment because the customer gains control at that time. Once the goods are shipped, we are precluded from redirecting the shipment to another customer. With respect to FOB destination sales, shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfilment activities and are accounted for as fulfilment costs and revenue is recorded upon final delivery to the customer location. Over Time Performance Obligations For performance obligations related to manufacturing of highly customized products that have no alternative use for us and for which we have an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards complete satisfaction using the Output Method based on the number of products produced. For similar performance obligations related to our tooling sales, we transfer control and recognize revenue over time by measuring progress towards complete satisfaction using the Input Method based on costs incurred relative to total estimated costs to completion. We believe these measurements provide a faithful depiction of the transfer of goods as the costs incurred reflect the value of the products produced. Product Sales Aptar primarily manufactures dispensing systems for our Beauty + Home, Pharma and Food + Beverage customers. The amount of consideration is typically fixed for such customers. At the time of delivery, the customer is invoiced the agreed-upon price. Revenue from product sales is typically recognized upon manufacture or shipment, when control of the goods transfers to the customer. To determine when the control transfers, Aptar typically assesses, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. A majority of product sales are sold FOB shipping point. For FOB shipping point shipments, control of the goods transfers to the customer at the time of shipment of the goods. Therefore, Aptar's performance obligation is satisfied at the time of shipment. Aptar has elected to account for shipping and handling costs that occur after the customer has obtained control of a good as fulfillment costs rather than as a promised service. Aptar does not have any material significant payment terms as payment is typically received shortly after the point of sale. There also exist instances where Aptar manufactures highly customized products that have no alternative use to Aptar and for which Aptar has an enforceable right to payment for performance completed to date. For these products, we transfer control and recognizes revenue over time by measuring progress towards completion using the Output Method based on the number of products produced. As we normally make our products to a customer’s order, the time between production and shipment of our products is typically within a few weeks. As a part of its customary business practice, Aptar offers a standard warranty that the products will materially comply with the technical specifications and will be free from material defects. Because such warranties are not sold separately, do not provide for any service beyond a guarantee of a product’s initial specifications, and are not required by law, there is no revenue deferral for these types of warranties. Tooling Sales Aptar also builds or contracts for molds and other tools (collectively defined as “tooling”) necessary to produce our products. As with product sales, Aptar recognizes revenue when control of the tool transfers to the customer. If the tooling is highly customized with no alternative use to Aptar and Aptar has an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards completion using the Input Method based on costs incurred relative to total estimated costs to completion. Otherwise, revenue for the tooling is recognized at the point in time when the customer approves the tool. Aptar does not have any material significant payment terms as payment is typically either received during the mold-build process or shortly after completion. In certain instances, Aptar offers extended warranties on our tools above and beyond the normal standard warranties. Aptar normally receives payment at the inception of the contract and recognizes revenue over the term of the contract. At December 31, 2018, $758 thousand of unearned revenue associated with outstanding contracts was reported in Accounts Payable, Accrued and Other Liabilities. At December 31, 2019, the unearned amount was $515 thousand. Aptar expects to recognize approximately $228 thousand of the unearned amount in 2020 and $287 thousand thereafter. Service Sales Aptar also provides services to its pharmaceutical customers. As with product sales, Aptar recognizes revenue based on completion of each performance obligation of the service contract. Contract Costs Aptar does not incur significant costs to obtain or fulfill revenue contracts. Practical Expedients Significant financing component: Aptar elected not to adjust the promised consideration for the time value of money for contracts where the difference between the time of payment and performance is one year or less. Remaining performance obligations: Aptar elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its contracts that are one year or less, as the revenue is expected to be recognized within the next year. In addition, we have elected not to disclose the expected consideration related to performance obligations where we recognize revenue in the amount it has a right to invoice (e.g., usage-based pricing terms). |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
INVENTORIES | NOTE 3 INVENTORIES Inventories, by component net of reserves, consisted of: 2019 2018 Raw materials $ 111,653 $ 110,720 Work in process 123,750 131,091 Finished goods 140,392 139,299 Total $ 375,795 $ 381,110 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | N OTE 4 GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the year ended December 31, 2019 are as follows by reporting segment: Beauty + Food + Corporate Home Pharma Beverage & Other Total Balance as of December 31, 2017 Goodwill $ 223,947 $ 203,069 $ 16,871 $ 1,615 $ 445,502 Accumulated impairment losses — — — (1,615) (1,615) $ 223,947 $ 203,069 $ 16,871 $ — $ 443,887 Acquisition 5,565 174,343 103,678 — 283,586 Reallocation, net — (8,048) 8,048 — — Foreign currency exchange effects (5,579) (9,481) (318) — (15,378) Balance as of December 31, 2018 Goodwill $ 223,933 $ 359,883 $ 128,279 $ 1,615 $ 713,710 Accumulated impairment losses — — — (1,615) (1,615) $ 223,933 $ 359,883 $ 128,279 $ — $ 712,095 Acquisition — 57,934 — — 57,934 Foreign currency exchange effects (2,275) (4,167) (126) — (6,568) Balance as of December 31, 2019 Goodwill $ 221,658 $ 413,650 $ 128,153 $ 1,615 $ 765,076 Accumulated impairment losses — — — (1,615) (1,615) $ 221,658 $ 413,650 $ 128,153 $ — $ 763,461 During the fourth quarter of 2018, certain CSP Technologies product lines were transferred from Pharma segment to the Food + Beverage segment affecting the Active Packaging and Food + Beverage reporting units to better align our customer needs. The changes resulted in the reassignment of the assets and liabilities to the reporting units affected. The goodwill was reallocated to the reporting units affected using the relative fair value approach. During the third quarter of 2019, we performed a separate quantitative impairment assessment using a discounted cash flow analysis of the Active Packaging reporting unit, which was formed as a result of the CSP Technologies Acquisition in the third quarter of 2018. We calculated the fair value of the Active Packaging reporting unit and compared it with the associated carrying value (the “step one” approach) as of July 1, 2019. Based on this quantitative analysis, the fair value of the reporting unit exceeded the carrying value and therefore no impairment loss was recognized. We have completed the annual impairment analysis of our reporting units as of October 1, 2019 using a qualitative analysis of goodwill commonly referred to as the “step zero” approach for each of our reporting units. Based on our review of macroeconomic, industry, and market events and circumstances as well as the overall financial performance of the reporting units, we determined that it was more likely than not that the fair value of these reporting units was greater than their carrying amounts. No impairment was recognized during the years ended December 31, 2019, 2018 or 2017. The table below shows a summary of intangible assets for the years ended December 31, 2019 and 2018. 2019 2018 Weighted Average Gross Gross Amortization Period Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents 7.2 $ 2,804 (1,318) $ 1,486 $ 5,427 $ (5,294) $ 133 Acquired technology 13.0 100,511 (25,430) 75,081 92,389 (18,304) 74,085 Customer relationships 13.6 217,934 (33,924) 184,010 179,597 (20,439) 159,158 Trademarks and trade names 7.0 35,015 (11,003) 24,012 21,243 (5,914) 15,329 License agreements and other 10.3 16,153 (9,658) 6,495 13,852 (7,653) 6,199 Total intangible assets 12.6 $ 372,417 $ (81,333) $ 291,084 $ 312,508 $ (57,604) $ 254,904 Aggregate amortization expense for the intangible assets above for the years ended December 31, 2019, 2018 and 2017 was $27,608, $15,455 and $10,339 , respectively. Estimated amortization expense for the years ending December 31 is as follows: 2020 $ 31,135 2021 29,582 2022 29,343 2023 29,171 2024 and thereafter 171,853 Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of December 31, 2019. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES. | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 5 ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES At December 31, 2019 and 2018, accounts payable, accrued and other liabilities consisted of the following: 2019 2018 Accounts payable, principally trade $ 192,739 $ 164,528 Accrued employee compensation costs 163,839 168,349 Customer deposits and other unearned income 86,820 67,775 Other accrued liabilities 129,630 124,547 Total $ 573,028 $ 525,199 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 6 INCOME TAXES On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“TCJA”), which significantly changed U.S. tax law. The TCJA lowered the Company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018, while imposing a deemed repatriation tax on previously deferred foreign income. The Company completed its accounting for the income tax effects of the TCJA during 2018, in accordance with the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118. Income before income taxes consists of: Years Ended December 31, 2019 2018 2017 United States $ 94,612 $ 34,404 $ 36,139 International 247,457 231,616 258,686 Total $ 342,069 $ 266,020 $ 294,825 The provision (benefit) for income taxes is composed of: Years Ended December 31, 2019 2018 2017 Current: U.S. Federal $ 2,129 $ 10,273 $ (342) State/Local 883 877 230 International 88,084 83,456 72,670 $ 91,096 $ 94,606 $ 72,558 Deferred: U.S. Federal/State $ 4,670 $ (17,019) $ 2,570 International 4,076 (6,333) (332) $ 8,746 $ (23,352) $ 2,238 Total $ 99,842 $ 71,254 $ 74,796 The difference between the actual income tax provision and the tax provision computed by applying the statutory federal income tax rate of 21.0% in 2019 and 2018, and 35.0% in 2017 to income before income taxes is as follows: Years Ended December 31, 2019 2018 2017 Income tax at statutory rate $ 71,835 $ 55,864 $ 103,189 State income taxes (benefits), net of federal (tax) benefit 2,622 (1,516) (2,620) Investment incentives (2,530) (1,900) (1,900) Tax resolutions (1,915) (3,400) (5,188) Excess tax benefits from share-based compensation (12,520) (10,800) (10,383) Deferred benefits from tax rate changes — (2,800) (5,055) U.S. GILTI and BEAT (1,485) 5,625 — U.S. tax reform - transition tax — (2,570) 31,575 Results of forward contract — — (23,883) Valuation allowance 10,623 3,170 1,344 Rate differential on earnings of foreign operations 29,807 26,424 (16,097) Other items, net 3,405 3,157 3,814 Actual income tax provision $ 99,842 $ 71,254 $ 74,796 Effective income tax rate 29.2 % 26.8 % 25.4 % The 2019 tax provision was favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2019 reflects a $12.5 million benefit from this item. The mix of pretax income has an unfavorable impact, because the majority of our income is earned in higher tax jurisdictions. Additionally, we have incurred losses in jurisdictions where we cannot tax effect the loss. We have elected to account for the tax on the U.S. GILTI as a period cost and not as a measure of deferred taxes. The 2018 tax provision was favorably impacted by excess tax benefits on deductible stock compensation. The tax provision for 2018 reflects a $10.8 million benefit from this item. The mix of pretax income has an unfavorable impact, reflecting that the majority of our income is earned in higher tax jurisdictions. The U.S. GILTI tax and Base Erosion Anti-Abuse Tax (“BEAT”) also had a $5.6 million unfavorable impact. The 2017 tax provision was favorably impacted by the mix of pretax income in various non-U.S. tax jurisdictions. The tax provision for 2017 reflects $10.4 million related to the excess tax benefits on deductible stock compensation, which is new for 2017. The deferred tax benefit of $5.1 million is net of a provisional benefit of $6.8 million recorded for the change in the U.S. tax rate and a charge of $1.7 million for tax rate changes in France and Argentina. The $5.2 million related to tax resolutions includes an amount of $3.2 million related to uncertain tax positions in Europe. The remaining $2.0 million is a refund from a distribution tax paid in France. Furthermore, the tax provision for 2017 reflects a provisional charge of $31.6 million from the transition tax enacted as part of the U.S. tax reform. This was partially offset by a benefit of $23.9 million from the forward contracts discussed in Note 11 – Derivative Instruments and Hedging Activities. Significant deferred tax assets and liabilities as of December 31, 2019 and 2018 are composed of the following temporary differences: 2019 2018 Deferred Tax Assets: Net operating loss carryforwards $ 24,941 $ 22,462 Operating and finance leases 25,440 — Pension liabilities 24,925 15,405 Share-based compensation 6,082 10,130 U.S. federal tax credits 8,575 12,045 U.S. state tax credits 7,881 10,186 Vacation and bonus 7,645 6,891 Research and development 7,539 6,945 Inventory 5,993 6,038 Workers compensation 3,835 3,373 Other 16,496 13,985 Total gross deferred tax assets 139,352 107,460 Less valuation allowance (23,320) (11,189) Net deferred tax assets 116,032 96,271 Deferred Tax Liabilities: Acquisition related intangibles 62,851 59,004 Depreciation and amortization 28,284 31,140 Operating and finance leases 27,555 2,034 Other 6,215 10,351 Total gross deferred tax liabilities 124,905 102,529 Net deferred tax (liabilities) assets $ (8,873) $ (6,258) The $12.1 million increase in our valuation allowance in 2019 is primarily due to losses in foreign jurisdictions where we cannot record the benefit of the losses. We evaluate the deferred tax assets and record a valuation allowance when it is believed it is more likely than not that the benefit will not be realized. We have established a valuation allowance for $20.2 million of the $24.9 million of tax effected net operating loss carryforwards. These losses are generally in locations that have not produced cumulative three year operating profit. A valuation allowance of $3.1 million has also been established against the $7.9 million of U.S. state tax credit carryforwards. The U.S. federal tax credits will expire in the years 2026 and 2027. There is no expiration date on $20.8 million of the tax-effected net operating loss carryforwards and $4.1 million (tax effected) will expire in the years 2020 to 2038. The U.S. state tax credit carryforwards of $7.9 million (tax effected) will expire in the years 2020 to 2034. As a result of U.S. tax reform and the U.S. GILTI provisions, none of the non-U.S. unremitted earnings will be subject to U.S. taxation. We maintain our assertion that all other cash and distributable reserves at our non-U.S. affiliates will continue to be indefinitely reinvested. We estimate the amount of additional local and withholding tax that would be payable on distributions to be in the range of $20 million to $30 million. We have not provided for taxes on certain tax-deferred income of a foreign operation. The income arose predominately from government grants. Taxes of approximately $1.6 million would become payable in the event the terms of the grant are not fulfilled. Income Tax Uncertainties We provide a liability for the amount of tax benefits realized from uncertain tax positions. A reconciliation of the beginning and ending amount of income tax uncertainties is as follows: 2019 2018 2017 Balance at January 1 $ 3,559 $ 3,080 $ 6,356 Increases based on tax positions for the current year 412 360 370 Increases based on tax positions of prior years 663 610 1,562 Settlements (558) (491) (4,874) Lapse of statute of limitations (429) — (334) Balance at December 31 $ 3,647 $ 3,559 $ 3,080 The amount of income tax uncertainties that, if recognized, would impact the effective tax rate is approximately $3.6 million. We estimate that it is reasonably possible that the liability for uncertain tax positions will decrease no more than $1.8 million in the next twelve months from the resolution of various uncertain positions as a result of the completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions. We recognize interest and penalties accrued related to unrecognized tax benefits as a component of income taxes. As of December 31, 2019, 2018 and 2017, we had approximately $1.7 million, $1.9 million and $1.6 million, respectively, accrued for the payment of interest and penalties, of which approximately $0.2 million was recognized as a tax benefit for the year ended 2019 and $0.4 million and $0.1 million was recognized in income tax expense in the years ended December 31, 2018 and 2017, respectively. Aptar or its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. The major tax jurisdictions we file in, with the years still subject to income tax examinations, are listed below: Tax Years Major Tax Subject to Jurisdiction Examination United States — Federal 2014-2019 United States — State 2010-2019 France 2016-2019 Germany 2015-2019 Italy 2014-2019 China 2010-2019 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2019 | |
DEBT | |
DEBT | NOTE 7 DEBT Notes Payable, Revolving Credit Facility and Overdrafts At December 31, 2019 and 2018, our notes payable, revolving credit facility and overdrafts, consisted of the following: 2019 2018 Revolving credit facility $ 25,000 $ 79,000 Notes payable 1,436 4,544 Overdrafts 17,823 17,749 $ 44,259 $ 101,293 We maintain a multi-currency revolving credit facility with two tranches that matures in July 2022 which provides for unsecured financing of up to $300 million that is available in the U.S. and up to €150 million that is available to our wholly-owned UK subsidiary. $25.0 million was utilized under our U.S. facility and no balance was utilized under our euro-based revolving credit facility as of December 31, 2019. No balance was utilized under our U.S. facility and €69.0 million was utilized under our euro-based revolving credit facility as of December 31, 2018. There are no compensating balance requirements associated with our revolving credit facility. Each borrowing under the credit facility will bear interest at rates based on LIBOR, prime rates or other similar rates, in each case plus an applicable margin. A facility fee on the total amount of the facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the credit facility and the facility fee percentage may change from time to time depending on changes in AptarGroup’s consolidated leverage ratio. We incurred approximately $1.5 million in interest and fees related to this credit facility during both 2019 and 2018. Average borrowings under the revolving credit facility and notes payable were $34.1 million and $40.0 million for 2019 and 2018, respectively. The average annual interest rate on the revolving credit facility and notes payable was 1.6% and 1.9% for 2019 and 2018, respectively. Long-Term Obligations At December 31, 2019, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90% , due in monthly and annual installments through 2028 $ 19,220 $ — $ 19,220 Senior unsecured notes 3.2% , due in 2022 75,000 64 74,936 Senior unsecured debts 3.2% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 390 167,610 Senior unsecured notes 3.5% , due in 2023 125,000 144 124,856 Senior unsecured notes 1.0% , due in 2023 112,170 356 111,814 Senior unsecured notes 3.4% , due in 2024 50,000 63 49,937 Senior unsecured notes 3.5% , due in 2024 100,000 144 99,856 Senior unsecured notes 1.2% , due in 2024 224,340 742 223,598 Senior unsecured notes 3.6% , due in 2025 125,000 169 124,831 Senior unsecured notes 3.6% , due in 2026 125,000 169 124,831 Finance Lease Liabilities 29,952 — 29,952 $ 1,153,682 $ 2,241 $ 1,151,441 Current maturities of long-term obligations (65,988) — (65,988) Total long-term obligations $ 1,087,694 $ 2,241 $ 1,085,453 At December 31, 2018, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 16.00% , due in monthly and annual installments through 2028 $ 15,531 $ — $ 15,531 Senior unsecured notes 3.2% , due in 2022 75,000 88 74,912 Senior unsecured debts 4.0% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 224,000 541 223,459 Senior unsecured notes 3.5% , due in 2023 125,000 181 124,819 Senior unsecured notes 1.0% , due in 2023 114,535 432 114,103 Senior unsecured notes 3.4% , due in 2024 50,000 76 49,924 Senior unsecured notes 3.5% , due in 2024 100,000 181 99,819 Senior unsecured notes 1.2% , due in 2024 229,070 904 228,166 Senior unsecured notes 3.6% , due in 2025 125,000 207 124,793 Senior unsecured notes 3.6% , due in 2026 125,000 208 124,792 Capital lease obligations 8,353 — 8,353 $ 1,191,489 $ 2,818 $ 1,188,671 Current maturities of long-term obligations (62,678) — (62,678) Total long-term obligations $ 1,128,811 $ 2,818 $ 1,125,993 The aggregate long-term maturities, excluding finance lease liabilities, which are discussed in Note 8, due annually for the next five years are $61,670 , $61,337 , $135,324 , $239,826, $375,169 and $250,404 thereafter. Covenants Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including: Requirement Level at December 31, 2019 Consolidated Leverage Ratio (1) Maximum of 3.50 to 1.00 1.71 to 1.00 Consolidated Interest Coverage Ratio (1) Minimum of 3.00 to 1.00 16.21 to 1.00 (1) Definitions of ratios are included as part of the revolving credit facility agreement and the private placement agreements . |
LEASE COMMITMENTS
LEASE COMMITMENTS | 12 Months Ended |
Dec. 31, 2019 | |
LEASE COMMITMENTS | |
LEASE COMMITMENTS | NOTE 8 LEASE COMMITMENTS We lease certain warehouse, plant, and office facilities as well as certain equipment under noncancelable operating and finance leases expiring at various dates through the year 2032. Most of the operating leases contain renewal options and certain leases include options to purchase the related asset during or at the end of the lease term. Amortization expense related to finance leases is included in depreciation expense while rent expense related to operating leases is included within cost of sales and selling research & development and administrative expenses (“SG&A”). Rent expense related to operating leases (including taxes, insurance and maintenance when included in the rent) amounted to $32.7 million in 2018 under the old lease accounting standard. The components of lease expense for the current period were as follows: Year Ended December 31, 2019 Operating lease cost $ 23,410 Finance lease cost: Amortization of right-of-use assets $ 4,217 Interest on lease liabilities 1,353 Total finance lease cost $ 5,570 Short-term lease and variable lease costs $ 8,629 Supplemental cash flow information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21,872 Operating cash flows from finance leases 1,245 Financing cash flows from finance leases 4,730 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 15,226 Finance leases 15,957 Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating Leases Operating lease right-of-use assets $ 72,377 Accounts payable, accrued and other liabilities $ 16,578 Operating lease liabilities 55,276 Total operating lease liabilities $ 71,854 Finance Leases Property, plant and equipment, gross $ 47,020 Accumulated depreciation (4,271) Property, plant and equipment, net $ 42,749 Current maturities of long-term obligations, net of unamortized debt issuance cost $ 4,318 Long-term obligations, net of unamortized debt issuance cost 25,634 Total finance lease liabilities $ 29,952 Weighted Average Remaining Lease Term (in years) Operating leases 6.1 Finance leases 7.0 Weighted Average Discount Rate Operating leases 5.05 % Finance leases 5.13 % Maturities of lease liabilities as of December 31, 2019, were as follows: Operating Finance Leases Leases Year 1 $ 19,652 $ 5,655 Year 2 15,411 4,787 Year 3 10,740 3,870 Year 4 9,365 3,099 Year 5 6,998 2,658 Thereafter 22,331 18,051 Total lease payments 84,497 38,120 Less imputed interest (12,643) (8,168) Total $ 71,854 $ 29,952 Maturities of lease liabilities as of December 31, 2018 under the old lease accounting standard were as follows: Operating Capital Leases Leases Year 1 $ 26,512 $ 1,828 Year 2 21,386 1,653 Year 3 16,529 1,546 Year 4 12,549 1,160 Year 5 10,225 880 Thereafter 21,932 3,827 Total lease payments $ 109,133 10,894 Less imputed interest (2,541) Present value of future lease payments $ 8,353 As of December 31, 2019, we have additional operating and finance leases, primarily for buildings, that have not yet commenced of $1.8 million. These operating and finance leases will commence in 2020 with lease terms of 3 to 10 years . |
RETIREMENT AND DEFERRED COMPENS
RETIREMENT AND DEFERRED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2019 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | NOTE 9 RETIREMENT AND DEFERRED COMPENSATION PLANS We have various noncontributory retirement plans covering certain of our domestic and foreign employees. Benefits under our retirement plans are based on participants’ years of service and annual compensation as defined by each plan. Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Certain pension commitments under our foreign plans are also funded according to local requirements or at our discretion. The following table presents the changes in the benefit obligations and plan assets for the most recent two years for our domestic and foreign plans. Domestic Plans Foreign Plans 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year $ 180,803 $ 198,450 $ 104,911 $ 109,030 Service cost 11,093 11,396 5,921 5,954 Interest cost 7,381 6,878 2,023 1,828 Special termination benefit charge — — 64 62 Plan Amendment — — 18 — Curtailment/Settlement — — (271) (1,751) Transfer — — 939 — Business acquired — — — 1,937 Prior service cost — — (451) 35 Actuarial loss (gain) 39,209 (23,510) 13,575 (3,743) Benefits paid (11,211) (12,411) (4,130) (3,288) Foreign currency translation adjustment — — (2,109) (5,153) Benefit obligation at end of year $ 227,275 $ 180,803 $ 120,490 $ 104,911 Domestic Plans Foreign Plans 2019 2018 2019 2018 Change in plan assets: Fair value of plan assets at beginning of year $ 169,958 $ 169,600 $ 68,992 $ 73,384 Actual return on plan assets 29,618 (7,642) 3,851 (487) Employer contribution 436 20,411 6,542 2,780 Benefits paid (11,211) (12,411) (4,130) (3,288) Transfer — — 359 — Foreign currency translation adjustment — — (1,425) (3,397) Fair value of plan assets at end of year $ 188,801 $ 169,958 $ 74,189 $ 68,992 Funded status at end of year $ (38,474) $ (10,845) $ (46,301) $ (35,919) The following table presents the funded status amounts recognized in our Consolidated Balance Sheets as of December 31, 2019 and 2018. Domestic Plans Foreign Plans 2019 2018 2019 2018 Non-current assets $ — $ 207 $ 938 $ 500 Current liabilities (449) (430) (44) (8) Non-current liabilities (38,025) (10,622) (47,195) (36,411) $ (38,474) $ (10,845) $ (46,301) $ (35,919) The following table presents the amounts not recognized as components of periodic benefit cost that are recognized in accumulated other comprehensive loss as of December 31, 2019 and 2018. Domestic Plans Foreign Plans 2019 2018 2019 2018 Net actuarial loss $ 68,789 $ 48,776 $ 40,442 $ 29,761 Net prior service cost — — 3,774 4,656 Tax effects (15,821) (17,876) (14,040) (4,855) $ 52,968 $ 30,900 $ 30,176 $ 29,562 Changes in benefit obligations and plan assets recognized in other comprehensive income in 2019, 2018 and 2017 are as follows: Domestic Plans 2019 2018 2017 Current year actuarial (loss) gain $ (21,970) $ 4,611 $ (12,593) Amortization of net loss 1,957 4,873 3,205 $ (20,013) $ 9,484 $ (9,388) Foreign Plans 2019 2018 2017 Current year actuarial (loss) gain $ (11,999) $ 534 $ 2,952 Current year prior service cost 451 (35) (1,399) Transfer Prior service Cost (18) — — Transfer Actuarial (loss) gain (126) — — Recognition due to curtailment — 1,692 — Amortization of net loss 1,444 1,716 1,895 Amortization of prior service cost 449 720 400 $ (9,799) $ 4,627 $ 3,848 The following table presents the amounts in accumulated other comprehensive loss as of December 31, 2019 expected to be recognized as components of periodic benefit cost in 2020. Domestic Plans Foreign Plans Amortization of net loss $ 5,719 $ 2,092 Amortization of prior service cost — 391 $ 5,719 $ 2,483 Components of net periodic benefit cost: Domestic Plans 2019 2018 2017 Service cost $ 11,093 $ 11,396 $ 9,706 Interest cost 7,381 6,878 7,010 Expected return on plan assets (12,379) (11,257) (9,880) Amortization of net loss 1,957 4,873 3,205 Net periodic benefit cost $ 8,052 $ 11,890 $ 10,041 Foreign Plans 2019 2018 2017 Service cost $ 5,921 $ 5,954 $ 5,526 Interest cost 2,023 1,828 1,747 Expected return on plan assets (2,366) (2,610) (2,409) Amortization of net loss 1,444 1,716 1,895 Amortization of prior service cost 449 720 400 Net periodic benefit cost $ 7,471 $ 7,608 $ 7,159 Curtailment (246) (59) — Special termination benefit charge 65 62 — Total Net periodic benefit cost $ 7,290 $ 7,611 $ 7,159 The accumulated benefit obligation (“ABO”) for our domestic defined benefit pension plans was $205.3 million and $163.0 million at December 31, 2019 and 2018, respectively. The ABO for our foreign defined benefit pension plans was $91.8 million and $80.9 million at December 31, 2019 and 2018, respectively. The following table provides the projected benefit obligation (“PBO”), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets as of December 31, 2019 and 2018. Domestic Plans Foreign Plans 2019 2018 2019 2018 Projected benefit obligation $ 227,275 $ 11,052 $ 92,561 $ 93,029 Accumulated benefit obligation 205,326 9,216 65,062 68,981 Fair value of plan assets 188,801 — 46,371 56,611 The following table provides the PBO, ABO and fair value of plan assets for all pension plans with a PBO in excess of plan assets as of December 31, 2019 and 2018. Domestic Plans Foreign Plans 2019 2018 2019 2018 Projected benefit obligation $ 227,275 $ 11,052 $ 102,310 $ 92,555 Accumulated benefit obligation 205,326 9,216 73,943 68,506 Fair value of plan assets 188,801 — 55,260 56,136 During 2018, our domestic employee retirement plan has plan assets in excess of the PBO. Assumptions: Domestic Plans Foreign Plans 2019 2018 2017 2019 2018 2017 Weighted-average assumptions used to determine benefit obligations at December 31: Discount rate 3.20 % 4.20 % 3.55 % 1.04 % 1.82 % 1.62 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 3.05 % 3.01 % 3.02 % Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31: Discount rate 4.20 % 3.55 % 4.05 % 1.84 % 1.62 % 1.65 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % 3.69 % 3.66 % 3.66 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 3.05 % 3.02 % 3.00 % We develop the expected long-term rate of return assumptions based on historical experience and by evaluating input from the plans’ asset managers, including the managers’ review of asset class return expectations and benchmarks, economic indicators and long-term inflation assumptions. In order to determine the 2020 net periodic benefit cost, we expect to use the December 31, 2019 discount rates, December 31, 2019 rates of compensation increase assumptions and the same assumed long-term returns on domestic and foreign plan assets used for the 2019 net periodic benefit cost. Our domestic and foreign pension plan weighted-average asset allocations at December 31, 2019 and 2018 by asset category are as follows: Plan Assets: Domestic Plans Assets Foreign Plans Assets at December 31, at December 31, 2019 2018 2019 2018 Equity securities 49 % 44 % 4 % 4 % Fixed income securities 29 % 29 % 1 % 1 % Corporate debt securities — — 3 % 3 % Infrastructure 6 % 7 % — — Hedge funds 10 % 10 % — — Money market 1 % 5 % 3 % 1 % Investment Funds — — 89 % 91 % Real estate 5 % 5 % — — Total 100 % 100 % 100 % 100 % Our investment strategy for our domestic and foreign pension plans is to maximize the long-term rate of return on plan assets within an acceptable level of risk. The investment policy strives to have assets sufficiently diversified so that adverse or unexpected results from one security type will not have an unduly detrimental impact on the entire portfolio and accordingly, establishes a target allocation for each asset category within the portfolio. The domestic plan asset allocation is reviewed on a quarterly basis and the foreign plan asset allocation is reviewed annually. Rebalancing occurs as needed to comply with the investment strategy. The domestic plan target allocation for 2020 is 60% equity securities and 40% fixed income securities and infrastructure. The foreign plan target allocation for 2020 is 100% investment funds. Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: ● Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. ● Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. ● Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. Domestic Fair Value Measurement Foreign Fair Value Measurement at December 31, 2019 at December 31, 2019 (In Thousands $) Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Cash and Short-term Securities (a) $ 1,988 $ 1,988 $ — $ — $ 2,030 $ 2,030 $ — $ — USD — 1,988 — — — — — — EUR — — — — — 2,012 — — Others — — — — — 18 — — Equity Securities (a) $ 81,997 $ 81,997 — — $ 2,995 $ 2,995 — — U.S. Large Cap Equities — 48,580 — — — — — — U.S. Small Cap Equities — 9,921 — — — — — — International Equities — 23,496 — — — 2,995 — — Fixed Income (a&b) $ 35,898 $ 35,898 — — $ 820 $ 820 — — Corporate debts securities — — — — $ 2,115 $ 2,115 — — Euro Corporate Bonds (a) — — — — — 2,115 — — Investment Funds — — — — $ 66,229 $ 23,797 $ 42,432 — Mutual Funds in Equities (a) — — — — — 4,025 — — Mutual Funds in Bonds (a) — — — — — 18,881 — — Mutual Funds Diversified (a&b) — — — — — 891 42,432 — Total Investments in Fair Value Hierarchy $ 119,883 $ 119,883 $ — $ — $ 74,189 $ 31,757 $ 42,432 $ — Investments at Net Asset Value per Share 68,918 — — — — — — — Total Investments $ 188,801 $ 119,883 $ — $ — $ 74,189 $ 31,757 $ 42,432 $ — Domestic Fair Value Measurement Foreign Fair Value Measurement at December 31, 2018 at December 31, 2018 (In Thousands $) Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Cash and Short-term Securities (a) $ 8,964 $ 8,964 $ — $ — $ 718 $ 718 $ — $ — USD — 8,964 — — — — — — EUR — — — — — 718 — — Equity Securities (a) $ 66,707 $ 66,707 — — $ 2,591 $ 2,591 — — U.S. Large Cap Equities — 38,804 — — — — — — U.S. Small Cap Equities — 7,747 — — — — — — International Equities — 20,156 — — — 2,591 — — Fixed Income (a&b) $ 32,272 $ 32,272 — — $ 717 $ 717 — — Corporate debts securities — — — — $ 2,097 $ 2,097 — — Euro Corporate Bonds (a) — — — — — 2,097 — — Investment Funds — — — — $ 62,869 $ 22,122 $ 40,747 — Mutual Funds in Equities (a) — — — — — 3,339 — — Mutual Funds in Bonds (a) — — — — — 18,060 — — Mutual Funds Diversified (a&b) — — — — — 723 40,747 — Total Investments in Fair Value Hierarchy $ 107,943 $ 107,943 $ — $ — $ 68,992 $ 28,245 $ 40,747 $ — Investments at Net Asset Value per Share 62,015 — — — — — — — Total Investments $ 169,958 $ 107,943 $ — $ — $ 68,992 $ 28,245 $ 40,747 $ — (a) Based on third party quotation from financial institution. (b) Based on observable market transactions. Contributions Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by ERISA. We contributed $0.4 million to our domestic defined benefit plans in 2019 and although we have no minimum funding requirement, we plan to contribute approximately $0.4 million to pay our ongoing SERP annuity contracts in 2020. Contributions to fund pension costs accrued under our foreign plans are made in accordance with local laws or at our discretion. We contributed approximately $6.5 million to our foreign defined benefit plan in 2019 and expect to contribute approximately $0.7 million in 2020. Estimated Future Benefit Payments As of December 31, 2019, we expect the plans to make the following estimated benefit payments relating to our defined benefit plans over the next ten years: Domestic Plans Foreign Plans 2020 $ 11,064 $ 5,382 2021 11,134 2,904 2022 11,665 3,155 2023 12,467 4,676 2024 13,077 6,537 2025 - 2029 74,584 34,386 Other Plans We have a non-qualified supplemental pension plan for domestic employees which provides for pension amounts that would have been payable from our principal domestic pension plan if it were not for limitations imposed by income tax regulations. The liability for this plan, which is not funded, was $12.6 million and $11.1 million at December 31, 2019 and 2018, respectively. This amount is included in the liability for domestic plans shown above. We have a defined contribution 401(k) employee savings plan available to substantially all domestic employees. Company matching contributions are made in cash up to a maximum of 3% of the participating employee’s salary subject to income tax regulations. For each of the years ended December 31, 2019, 2018 and 2017, total contributions made to these plans were approximately $4.1 million, $3.7 million and $3.3 million, respectively. We have several foreign defined contribution plans, which require us to contribute a percentage of the participating employee’s salary according to local regulations. For each of the years ended December 31, 2019, 2018 and 2017, total contributions made to these plans were approximately $2.3 million, $2.4 million and $2.2 million, respectively. We have no additional postretirement or postemployment benefit plans. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 10 ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) Changes in Accumulated Other Comprehensive Income/(Loss) by Component: Foreign Defined Benefit Currency Pension Plans Derivatives Total Balance - December 31, 2016 $ (259,888) $ (59,775) $ (46) $ (319,709) Other comprehensive income (loss) before reclassifications 74,385 (8,944) (11,806) 53,635 Amounts reclassified from accumulated other comprehensive income (loss) — 4,124 8,648 12,772 Net current-period other comprehensive income (loss) 74,385 (4,820) (3,158) 66,407 Balance - December 31, 2017 $ (185,503) $ (64,595) $ (3,204) $ (253,302) Other comprehensive (loss) income before reclassifications (62,898) 5,266 16,624 (41,008) Amounts reclassified from accumulated other comprehensive income (loss) — 5,524 (15,060) (9,536) Net current-period other comprehensive (loss) income (62,898) 10,790 1,564 (50,544) Reclassification of stranded tax effects — (6,658) — (6,658) Balance - December 31, 2018 $ (248,401) $ (60,463) $ (1,640) $ (310,504) Other comprehensive (loss) income before reclassifications (8,723) (25,557) 8,026 (26,254) Amounts reclassified from accumulated other comprehensive income (loss) — 2,873 (8,063) (5,190) Net current-period other comprehensive (loss) income (8,723) (22,684) (37) (31,444) Balance - December 31, 2019 $ (257,124) $ (83,147) $ (1,677) $ (341,948) Reclassifications Out of Accumulated Other Comprehensive Income/(Loss): Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Year Ended December 31, 2019 2018 2017 Defined Benefit Pension Plans Amortization of net loss $ 3,401 $ 6,589 $ 5,100 (1) Amortization of prior service cost 449 720 400 (1) 3,850 7,309 5,500 Total before tax (977) (1,785) (1,376) Tax benefit $ 2,873 $ 5,524 $ 4,124 Net of tax Derivatives Changes in treasury locks $ — $ 26 $ 42 Interest Expense Changes in cross currency swap: interest component (4,805) (5,150) (1,526) Interest Expense Changes in cross currency swap: foreign exchange component (3,258) (13,025) 11,911 Miscellaneous, net (8,063) (18,149) 10,427 Total before tax — 3,089 (1,779) Tax benefit $ (8,063) $ (15,060) $ 8,648 Net of tax Total reclassifications for the period $ (5,190) $ (9,536) $ 12,772 (1) These accumulated other comprehensive income components are included in the computation of total net periodic benefit costs, net of tax (see Note 9 - Retirement and Deferred Compensation Plans for additional details). |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 11 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We maintain a foreign exchange risk management policy designed to establish a framework to protect the value of our non-functional currency denominated transactions from adverse changes in exchange rates. Sales of our products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales or intercompany loans can impact our results of operations. Our policy is not to engage in speculative foreign currency hedging activities, but to minimize our net foreign currency transaction exposure defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. We may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks. For derivative instruments designated as hedges, we formally document the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness at inception. Quarterly thereafter, we formally assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur. All derivative financial instruments used as hedges are recorded at fair value in the Consolidated Balance Sheets (See Note 12 – Fair Value). Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the changes in fair values are recorded in accumulated other comprehensive loss and included in changes in derivative gain/loss. The changes in the fair values of derivatives designated as cash flow hedges are reclassified from accumulated other comprehensive loss to net income when the underlying hedged item is recognized in earnings. Cash flows from the settlement of derivative contracts designated as cash flow hedges offset cash flows from the underlying hedged items and are included in operating activities in the Consolidated Statements of Cash Flows. As disclosed in Note 7 – Debt, our wholly owned UK subsidiary borrowed $280 million in term loan borrowings under a new credit facility. In order to mitigate the currency risk of U.S. dollar debt on a euro functional currency entity and to mitigate the risk of variability in interest rates, we entered into a EUR/USD floating-to-fixed cross currency swap on July 20, 2017 in the notional amount of $280 million to effectively hedge the foreign exchange and interest rate exposure on the $280 million term loan. Related to this hedge, approximately $1.7 million and $1.6 million, respectively, of net after-tax loss is included in accumulated other comprehensive loss at December 31, 2019 and 2018. The amount expected to be recognized into earnings during the next 12 months related to the interest component of our cross currency swap, based on prevailing foreign exchange and interest rates at December 31, 2019, is $2.8 million. The amount expected to be recognized into earnings during the next 12 months related to the foreign exchange component of our cross currency swap is dependent on fluctuations in currency exchange rates. As of December 31, 2019, the fair value of the cross currency swap was a $2.6 million asset. The swap contract expires on July 20, 2022. Hedge of Net Investments in Foreign Operations A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our foreign entities. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial condition and results of operations. Conversely, a strengthening U.S. dollar has a dilutive effect. In some cases we maintain debt in these subsidiaries to offset the net asset exposure. We do not otherwise actively manage this risk using derivative financial instruments. In the event we plan on a full or partial liquidation of any of our foreign subsidiaries where our net investment is likely to be monetized, we will consider hedging the currency exposure associated with such a transaction. Other As of December 31, 2019, we have recorded the fair value of foreign currency forward exchange contracts of $0.2 million in prepaid and other and $0.4 million in accounts payable, accrued and other liabilities in the balance sheet. All forward exchange contracts outstanding as of December 31, 2019 had an aggregate notional contract amount of $51.5 million. Fair Value of Derivative Instruments in the Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018 December 31, 2019 December 31, 2018 Derivatives Derivatives Derivatives not Derivatives not Designated Designated Designated Designated Balance Sheet as Hedging as Hedging as Hedging as Hedging Location Instruments Instruments Instruments Instruments Derivative Assets Foreign Exchange Contracts Prepaid and other $ — $ 206 $ — $ 259 Cross Currency Swap Contract (1) Prepaid and other 2,552 — — — $ 2,552 $ 206 $ — $ 259 Derivative Liabilities Foreign Exchange Contracts Accounts payable, accrued and other liabilities $ — $ 401 $ — $ 331 Cross Currency Swap Contract (1) Accounts payable, accrued and other liabilities — — 1,040 — $ — $ 401 $ 1,040 $ 331 (1) This cross currency swap contract is composed of both an interest component and a foreign exchange component. The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Fiscal Years Ended December 31, 2019 and December 31, 2018 Amount of Gain (Loss) Total Amount Amount of Gain (Loss) Location of (Loss) Reclassified from of Affected Derivatives in Cash Recognized in Gain Recognized Accumulated Income Flow Hedging Other Comprehensive in Income on Other Comprehensive Statement Relationships Income on Derivative Derivatives Income on Derivative Line Item 2019 2018 2019 2018 Cross currency swap contract: Interest component $ 5,103 $ 7,014 Interest expense $ 4,805 $ 5,150 $ (35,489) Foreign exchange component 3,258 13,025 Miscellaneous, net 3,258 13,025 1,556 $ 8,361 $ 20,039 $ 8,063 $ 18,175 The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income for the Fiscal Years Ended December 31, 2019 and December 31, 2018 Amount of (Loss) Gain Derivatives Not Designated Location of (Loss) Gain Recognized Recognized in Income as Hedging Instruments in Income on Derivatives on Derivatives 2019 2018 Foreign Exchange Contracts Other (Expense) Income: $ (141) $ 652 $ (141) $ 652 Gross Amounts not Offset Gross Amounts Net Amounts in the Statement of Offset in the Presented in Financial Position Gross Statement of the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description December 31, 2019 Derivative Assets $ 2,758 — $ 2,758 — — $ 2,758 Total Assets $ 2,758 — $ 2,758 — — $ 2,758 Derivative Liabilities $ 401 — $ 401 — — $ 401 Total Liabilities $ 401 — $ 401 — — $ 401 December 31, 2018 Derivative Assets $ 259 — $ 259 — — $ 259 Total Assets $ 259 — $ 259 — — $ 259 Derivative Liabilities $ 1,371 — $ 1,371 — — $ 1,371 Total Liabilities $ 1,371 — $ 1,371 — — $ 1,371 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE | |
FAIR VALUE | NOTE 12 FAIR VALUE Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: ● Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. ● Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. ● Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. As of December 31, 2019, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 206 $ — $ 206 $ — Cross currency swap contract (1) 2,552 — 2,552 — Total assets at fair value $ 2,758 $ — $ 2,758 $ — Liabilities Foreign exchange contracts (1) $ 401 $ — $ 401 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,331 $ — $ 401 $ 5,930 As of December 31, 2018, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 259 $ — $ 259 $ — Total assets at fair value $ 259 $ — $ 259 $ — Liabilities Foreign exchange contracts (1) $ 331 $ — $ 331 $ — Cross currency swap contract (1) 1,040 — 1,040 — Total liabilities at fair value $ 1,371 $ — $ 1,371 $ — (1) Market approach valuation technique based on observable market transactions of spot and forward rates. The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instrument. We consider our long-term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long-term obligations was $1.1 billion as of December 31, 2019 and December 31, 2018. As discussed in Note 20 – Acquisitions, we have a contingent consideration obligation to the selling equity holders of Noble in connection with the Noble Acquisition (as defined herein) based on 2024 cumulative performance targets and a contingent consideration obligation to the selling equity holder of Gateway in connection with the Gateway Acquisitions (as defined herein) based on 2020 and 2022 performance targets. We consider these obligations a Level 3 liability and have estimated the aggregate fair value for these contingent consideration arrangements to be $2.9 million and $3.0 million, respectively, as of December 31, 2019. Additionally, during the year ended December 31, 2018, we had a contingent consideration obligation to the selling shareholders of Reboul SAS (“Reboul”) in connection with the Reboul Acquisition (as defined herein) based on 2018 earnings before net interest, taxes, depreciation and amortization (“EBITDA”). We consider this obligation a Level 3 liability; however, we estimated the aggregate fair value for this contingent consideration arrangement to be zero as of December 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 COMMITMENTS AND CONTINGENCIES In the normal course of business, we are subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on our financial position or results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur that could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows. Under our Certificate of Incorporation, we have agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. We have no liabilities recorded for these agreements as of December 31, 2019. An environmental investigation, undertaken to assess areas of possible contamination, was completed at our facility in Jundiaí, São Paulo, Brazil. The facility is primarily an internal supplier of anodized aluminum components for certain of our dispensing systems. The testing indicated that soil and groundwater in certain areas of the facility were impacted above acceptable levels established by local regulations. In March 2017, we reported the findings to the relevant environmental authority, the Environmental Company of the State of São Paulo – CETESB. Based upon our best estimate, we recorded a reserve of $1.5 million (operating expense) in the first quarter of 2017 relating to this contingency. For the year ended December 31, 2019, we have paid approximately $0.6 million and made adjustments to the accrual based on our future anticipated expenditures. As of December 31, 2019, our outstanding reserve is $0.5 million. The ultimate loss associated with this environmental contingency is subject to the investigation and ongoing review of the CETESB. We will continue to evaluate the range of likely costs as the investigation proceeds and we have further clarity on the nature and extent of remediation that will be required. We note that the contamination, or any failure to complete any required remediation in a timely manner, could potentially result in fines or penalties. In March 2017, the Supreme Court of Brazil issued a decision that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces our gross receipts tax in Brazil prospectively and, potentially, retrospectively. During the first quarter of 2019, we received a favorable court decision of $2.7 million for the retrospective right to recover part of our claim. This amount is recorded in cost of sales as a favorable impact of $1.7 million and $1.0 million was recognized as interest income. During the fourth quarter of 2018, we recorded an amount of $631 thousand based on the favorable court decision. If the Judicial Court grants full retrospective recovery, we estimate remaining potential recoveries of approximately $3 million to $10 million, including interest, depending on the future decisions of the Supreme Court of Brazil. Due to uncertainties around our remaining court recovery claims, we have not recorded any further amounts relating to the retrospective nature of this matter. In December 2019, tax authorities in Brazil notified us of a tax assessment of approximately $7.9 million, including interest and penalties of $3.0 million and $1.0 million, respectively, relating to differences in tax classification codes used for import duties for the period from January 2015 to August 2018. We are vigorously contesting the assessment, including interest and penalties, and have filed an administrative defense appeal in December 2019. Considering the complex nature of the assessment, we expect the appeal process to go through different levels of administrative and/or judicial processes. Accordingly, due to uncertainty of the timing and amounts of assessment, no liability is recorded as of December 31, 2019. |
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM | 12 Months Ended |
Dec. 31, 2019 | |
STOCK REPURCHASE PROGRAM | |
STOCK REPURCHASE PROGRAM | NOTE 14 STOCK REPURCHASE PROGRAM We announced the $350 million share repurchase program in effect for the year ended December 31, 2018 on October 20, 2016. On April 18, 2019, we announced a new share repurchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. Aptar may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions. In 2019 and 2018, we repurchased approximately 779 thousand and 668 thousand shares of our outstanding common stock at a total cost of $86.5 million and $61.7 million, respectively. As of December 31, 2019, there was $278.5 million of authorized share repurchases available to us. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL STOCK | |
CAPITAL STOCK | NOTE 15 CAPITAL STOCK We have 199 million authorized shares of common stock. The number of shares of common stock and treasury stock and the share activity were as follows: Common Shares Treasury Shares 2019 2018 2019 2018 Balance at the beginning of the year 67,341,316 66,742,490 4,424,884 4,881,889 Employee option exercises 1,079,841 1,182,547 (367,705) (502,005) Director option exercises 146,083 — — — Restricted stock vestings 41,268 39,691 — — Common stock repurchases — — 778,848 45,000 Common stock repurchased and retired — (623,412) — — Balance at the end of the year 68,608,508 67,341,316 4,836,027 4,424,884 The cash dividends paid on the common stock for the years ended December 31, 2019, 2018 and 2017 aggregated $90.2 million, $82.3 million and $79.9 million, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 16 STOCK-BASED COMPENSATION Historically we have issued stock options and restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a Restricted Stock Unit Award Agreement for Directors pursuant to the 2018 Equity Incentive Plan. Previously, non-employee directors were issued stock options under a Director Stock Option Plan. Stock options are awarded with the exercise price equal to the market price on the date of grant and generally vest over three years and expire 10 years after grant. RSUs granted to employees vest according to a specified performance period and/or vesting period. Time-based RSUs generally vest over three years . Performance-based RSUs vest at the end of the specified performance period, generally three years , assuming required performance or market vesting conditions are met. Performance-based RSUs have one of two vesting conditions: (1) based on Aptar’s internal financial performance metrics and (2) based on Aptar’s total shareholder return (“TSR”) relative to total shareholder returns of an industrial peer group, subject to discretion if the overall TSR is negative at the conclusion of the performance period. At the time of vesting, Aptar will issue or cause to be issued in the employee’s name the vested shares of common stock. In addition, RSU awards are generally net settled (shares are withheld to cover the employee tax obligation). Director RSUs are only time-based and generally vest over one year . Compensation expense recorded attributable to stock options for the year ended December 31, 2019 was approximately $5.7 million ( $4.5 million after tax). Approximately $4.8 million of the compensation expense was recorded in SG&A expenses and the balance was recorded in cost of sales. Compensation expense recorded attributable to stock options for the year ended December 31, 2018 was approximately $10.9 million ( $8.4 million after tax). Approximately $8.7 million of the compensation expense was recorded in SG&A and the balance was recorded in cost of sales. Compensation expense recorded attributable to stock options for the year ended December 31, 2017 was approximately $15.2 million ( $10.5 million after tax). Approximately $13.2 million of the compensation expense was recorded in SG&A expenses and the balance was recorded in cost of sales. For stock option grants, we used historical data to estimate expected life and volatility. The weighted-average fair value of stock options granted under the Stock Awards Plans was $14.82 and $11.86 per share in 2018 and 2017, respectively. These values were estimated on the respective dates of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Stock Awards Plans: Years Ended December 31, 2018 2017 Dividend Yield 1.5 % 1.7 % Expected Stock Price Volatility 14.2 % 15.8 % Risk-free Interest Rate 2.8 % 2.2 % Expected Life of Option (years) 6.6 6.7 A summary of option activity under our stock plans as of December 31, 2019, and changes during the period then ended is presented below: Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Options Exercise Price Options Exercise Price Outstanding, January 1, 2019 6,761,055 $ 65.76 155,200 $ 58.13 Granted — — — — Exercised (1,560,047) 57.10 (19,949) 55.99 Forfeited or expired (156,828) 73.15 — — Outstanding at December 31, 2019 5,044,180 $ 68.32 135,251 $ 58.45 Exercisable at December 31, 2019 4,288,542 $ 66.01 135,251 $ 58.45 Weighted-Average Remaining Contractual Term (Years): Outstanding at December 31, 2019 5.4 3.2 Exercisable at December 31, 2019 5.0 3.2 Aggregate Intrinsic Value: Outstanding at December 31, 2019 $ 239,033 $ 7,732 Exercisable at December 31, 2019 $ 212,745 $ 7,732 Intrinsic Value of Options Exercised During the Years Ended: December 31, 2019 $ 87,251 $ 1,172 December 31, 2018 $ 72,951 $ 2,286 December 31, 2017 $ 51,140 $ 1,995 The grant date fair value of options vested during the years ended December 31, 2019, 2018 and 2017 was $17.5 million, $16.5 million and $16.9 million, respectively. Cash received from option exercises was approximately $90.2 million and the actual tax benefit realized for the tax deduction from option exercises was approximately $19.5 million in the year ended December 31, 2019. As of December 31, 2019, the remaining valuation of stock option awards to be expensed in future periods was $2.3 million and the related weighted-average period over which it is expected to be recognized is 1.0 year. The fair value of both time-based RSUs and performance-based RSUs pertaining to internal performance metrics is determined using the closing price of our common stock and expected dividend on the grant date. The fair value of performance-based RSUs pertaining to TSR is estimated using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value are shown in the table below. The fair value of these RSUs is expensed over the vesting period using the straight-line method or using the graded vesting method when an employee becomes eligible to retain the award at retirement. Year Ended December 31, 2019 2018 Fair value per stock award $ 134.97 $ 128.70 Grant date stock price $ 104.51 $ 89.42 Assumptions: Aptar's stock price expected volatility 16.50 % 12.30 % Expected average volatility of peer companies 31.90 % 27.50 % Correlation assumption 37.40 % 20.20 % Risk-free interest rate 2.19 % 2.42 % Dividend yield assumption 1.30 % 1.43 % A summary of RSU activity as of December 31, 2019, and changes during the period then ended is presented below: Time-Based RSUs Performance-Based RSUs Weighted Average Weighted Average Units Grant-Date Fair Value Units Grant-Date Fair Value Nonvested at January 1, 2019 261,487 $ 91.78 69,990 $ 111.55 Granted 295,412 97.80 123,246 119.35 Vested (51,433) 88.77 — — Forfeited (24,737) 98.72 (11,556) 117.04 Nonvested at December 31, 2019 480,729 $ 95.45 181,680 $ 117.26 Included in the December 31, 2019 time-based RSUs are 11,490 units awarded to non-employee directors and 14,257 units vested related to non-employee directors. Compensation expense recorded attributable to RSUs for the years ended December 31, 2019, 2018 and 2017 was approximately $18.2 million, $8.7 million and $3.7 million, respectively. The actual tax benefit realized for the tax deduction from RSUs was approximately $1.0 million for the year ended December 31, 2019. The fair value of units vested during the years ended December 31, 2019, 2018 and 2017 was $4.6 million, $3.0 million and $4.7 million, respectively. The intrinsic value of units vested for the years ended December 31, 2019, 2018 and 2017 was $5.4 million, $3.7 million and $5.2 million, respectively. As of December 31, 2019, there was $28.9 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted average period of 2.9 years. We have a long-term incentive program for certain employees. Each award is based on the cumulative TSR of our common stock during a three year performance period compared to a peer group. The total expense related to this program for awards outstanding as of December 31, 2019 is approximately $2.7 million. For the years ended December 31, 2019, 2018 and 2017, we recognized expense of $0.8 million, $1.2 million and $0.7 million, respectively. The accrued awards will be paid in the first quarter of 2020 with no future grants anticipated as this TSR incentive program is no longer awarded. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 17 EARNINGS PER SHARE Basic net income per share is calculated by dividing net income attributable to Aptar by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to Aptar by the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to stock based compensation awards. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period would have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The reconciliation of basic and diluted earnings per share (“EPS”) for the years ended December 31, 2019, 2018 and 2017 are as follows: Income Shares Per Share (Numerator) (Denominator) Amount For the Year Ended December 31, 2019 Basic EPS Income available to common stockholders $ 242,202 63,574 $ 3.81 Effect of Dilutive Securities Stock options 2,344 Restricted stock 232 Diluted EPS Income available to common stockholders $ 242,202 66,150 $ 3.66 For the Year Ended December 31, 2018 Basic EPS Income available to common stockholders $ 194,745 62,437 $ 3.12 Effect of Dilutive Securities Stock options 2,440 Restricted stock 81 Diluted EPS Income available to common stockholders $ 194,745 64,958 $ 3.00 For the Year Ended December 31, 2017 Basic EPS Income available to common stockholders $ 220,030 62,435 $ 3.52 Effect of Dilutive Securities Stock options 2,106 Restricted stock 55 Diluted EPS Income available to common stockholders $ 220,030 64,596 $ 3.41 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 18 SEGMENT INFORMATION We are organized into three reporting segments. Operations that sell dispensing systems and sealing solutions primarily to the beauty, personal care and home care markets form the Beauty + Home segment. Operations that sell dispensing systems and sealing solutions to the prescription drug, consumer health care, injectables and active packaging markets form the Pharma segment. Operations that sell dispensing systems and sealing solutions to the food and beverage markets form the Food + Beverage segment. The accounting policies of the segments are the same as those described in Note 1 – Summary of Significant Accounting Policies. In order to more closely align with how the markets analyze our segment results, we have changed our non-U.S. GAAP segment measure of profitability from Segment Income to Adjusted EBITDA beginning in 2018. All internal segment reporting and discussions of results with our Chief Operating Decision Maker (CODM) are now based on segment Adjusted EBITDA. All references to segment profitability have been updated for this change. Financial information regarding our reporting segments is shown below: Year Ended December 31, 2019 2018 2017 Total Sales: Beauty + Home $ 1,376,027 $ 1,446,231 $ 1,333,048 Pharma 1,100,463 955,069 805,913 Food + Beverage 418,017 386,689 352,483 Total Sales $ 2,894,507 $ 2,787,989 $ 2,491,444 Less: Intersegment Sales: Beauty + Home $ 23,313 $ 19,849 $ 19,262 Pharma 9,412 417 33 Food + Beverage 2,050 2,962 2,866 Total Intersegment Sales $ 34,775 $ 23,228 $ 22,161 Net Sales: Beauty + Home $ 1,352,714 $ 1,426,382 $ 1,313,786 Pharma 1,091,051 954,652 805,880 Food + Beverage 415,967 383,727 349,617 Net Sales $ 2,859,732 $ 2,764,761 $ 2,469,283 Adjusted EBITDA (1): Beauty + Home $ 181,150 $ 185,926 $ 173,227 Pharma 387,483 343,706 275,933 Food + Beverage 68,108 57,589 62,903 Corporate & Other, unallocated (44,406) (36,285) (37,457) Acquisition-related costs (2) (3,927) (23,770) — Restructuring Initiatives (3) (20,472) (63,829) (2,208) Gain on insurance recovery (4) — — 10,648 Depreciation and amortization (5) (194,552) (171,747) (153,094) Interest Expense (35,489) (32,626) (40,597) Interest Income 4,174 7,056 5,470 Income before Income Taxes $ 342,069 $ 266,020 $ 294,825 Depreciation and Amortization: Beauty + Home $ 82,778 $ 83,546 $ 79,422 Pharma 65,590 51,495 41,143 Food + Beverage 35,728 27,467 24,720 Corporate & Other 10,456 9,239 7,809 Depreciation and Amortization $ 194,552 $ 171,747 $ 153,094 Capital Expenditures: Beauty + Home $ 96,040 $ 101,371 $ 76,425 Pharma 89,702 54,433 33,005 Food + Beverage 45,130 41,236 38,730 Corporate & Other 13,933 25,739 18,924 Transfer of Corporate Technology Expenditures (6) (2,529) (11,527) (10,460) Capital Expenditures $ 242,276 $ 211,252 $ 156,624 Total Assets: Beauty + Home $ 1,378,292 $ 1,373,816 $ 1,358,283 Pharma 1,422,815 1,324,696 881,443 Food + Beverage 534,527 501,700 296,271 Corporate & Other 226,485 177,523 601,826 Total Assets $ 3,562,119 $ 3,377,735 $ 3,137,823 (1) We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring, acquisition-related costs and insurance recoveries. (2) Acquisition-related costs include transaction costs and purchase accounting adjustments related to inventory for acquisitions (see Note 20 – Acquisitions for further details). (3) Restructuring Initiatives includes expense items for the years ended December 31, 2019 and 2018 as follows (see Note 21 – Restructuring Initiatives for further details): Year Ended December 31, 2019 2018 2017 Restructuring Initiatives by Segment Beauty + Home $ 17,682 $ 52,244 $ 529 Pharma 632 3,589 — Food + Beverage 391 4,185 1,679 Corporate & Other 1,767 3,811 — Total Restructuring Initiatives $ 20,472 $ 63,829 $ 2,208 (4) The gain on insurance recovery relates to the Annecy fire (see Note 19 – Insurance Settlement Receivable for further details). (5) Depreciation and amortization includes amortization related to acquisition purchase accounting adjustments for backlog. See the reconciliation of Non-U.S. GAAP measures starting on page 22 . (6) The transfer of corporate technology expenditures represents amounts of projects managed by corporate for the benefit of specific entities within each segment. Once the projects are complete, all related costs are allocated from corporate to and paid by the appropriate entity and the associated assets are then depreciated at the entity level. Geographic Information The following are net sales and long-lived asset information by geographic area and product information for the years ended December 31, 2019, 2018 and 2017: 2019 2018 2017 Net Sales to Unaffiliated Customers (1): United States $ 836,768 $ 726,336 $ 642,164 Europe: France 895,110 862,364 744,856 Germany 452,409 474,369 416,802 Italy 141,867 144,044 131,523 Other Europe 149,083 146,701 132,992 Total Europe 1,638,469 1,627,478 1,426,173 Other Foreign Countries 384,495 410,947 400,946 Total $ 2,859,732 $ 2,764,761 $ 2,469,283 Property, Plant and Equipment United States $ 300,820 $ 265,004 $ 182,434 Europe: France 338,288 308,250 266,804 Germany 163,782 154,505 163,948 Italy 53,562 54,978 57,080 Other Europe 63,636 59,411 59,963 Total Europe 619,268 577,144 547,795 Other Foreign Countries 167,590 149,465 137,677 Total $ 1,087,678 $ 991,613 $ 867,906 (1) Sales are attributed to countries based upon where the sales invoice to unaffiliated customers is generated. No single customer represents 6% or more of our net sales in 2019, 2018 or 2017. |
INSURANCE SETTLEMENT RECEIVABLE
INSURANCE SETTLEMENT RECEIVABLE | 12 Months Ended |
Dec. 31, 2019 | |
INSURANCE SETTLEMENT RECEIVABLE | |
INSURANCE SETTLEMENT RECEIVABLE | NOTE 19 INSURANCE SETTLEMENT RECEIVABLE A fire caused damage to our facility in Annecy, France in June 2016. The fire was contained to one of three production units and there were no reported injuries. Aptar Annecy supplies anodized aluminum components for certain Aptar dispensing systems. We are insured for the damages caused by the fire, including business interruption insurance, and we do not expect this incident to have a material impact on our financial results. Losses related to the Annecy fire of $18.9 million and $20.3 million were incurred during 2018 and 2017, respectively. For the year ended December 31, 2019, we received insurance proceeds of $3.4 million, and have no insurance receivable at year-end. Operating Income was negatively impacted by $5.8 million during 2018. These 2018 losses negatively impacted the Beauty + Home and Pharma segments by $3.8 million and $2.0 million, respectively. Operating income was negatively impacted by $5.6 million during 2017. During 2017, we also recognized $10.6 million of gain due to the insurance recovery on the involuntary conversion of fixed assets related to this fire, which is included in Other (Expense) Income on the Consolidated Statements of Income. These 2017 amounts impacted the Beauty + Home segment. The final settlement is still in process of negotiation with the insurance company. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 20 ACQUISITIONS Business Combinations On October 31, 2019, we completed our acquisition (the “Noble Acquisition”) of 100% of the equity interests of Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to as “Noble”). Noble, based in Orlando, FL, is a leading provider in developing patient-centric advanced drug delivery system training devices including autoinjector, prefilled syringe, onbody and respiratory devices for the world’s leading biopharmaceutical companies and original equipment manufacturers. The purchase price was approximately $62.3 million (net of $1.6 million of cash acquired) and was funded by cash on hand. As part of the Noble Acquisition, we are also obligated to pay to the selling equityholders of Noble certain contingent consideration based on 2024 cumulative financial performance metrics defined in the purchase agreement. Based on projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $2.9 million utilizing the Black-Scholes valuation model. We are in the process of finalizing purchase accounting. As of December 31, 2019, $5 million was held in restricted cash pending the finalization of a working capital adjustment. The results of Noble’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. On June 5, 2019, we completed our acquisition (the “Nanopharm Acquisition”) of all of the outstanding capital stock of Nanopharm Ltd. (“Nanopharm”). Nanopharm, located in Newport, UK, is a science-driven, leading provider of orally inhaled and nasal drug product design and development services. The purchase price was approximately $38.1 million (net of $1.8 million of cash acquired) and was funded by cash on hand. The results of Nanopharm’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. On May 31, 2019, we completed our acquisition (the “Gateway Acquisition”) of all of the outstanding equity interests of Gateway Analytical LLC (“Gateway”). Gateway, located in Gibsonia, PA, provides industry-leading particulate detection and predictive analytical services to customers developing injectable medicines. The purchase price was approximately $7.0 million and was funded by cash on hand. As part of the Gateway Acquisition, we are also obligated to pay to the selling equityholder of Gateway certain contingent consideration based on 2020 and 2022 performance targets defined in the purchase agreement. Based on projections as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $3.0 million. The results of Gateway’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. On August 27, 2018, we completed our acquisition (the “CSP Technologies Acquisition”) of all of the outstanding capital stock of CSP Technologies S.à r.l. (“CSP Technologies”). CSP Technologies is a leader in active packaging technology based on proprietary material science expertise for the pharma and food service markets. CSP Technologies operates manufacturing locations in the U.S. and France. The preliminary purchase price was approximately $553.5 million and was funded by cash on hand. As of December 31, 2018, $5 million was held in restricted cash pending the finalization of a working capital adjustment. The $5 million cash amount was released from restriction in January 2019 after the finalization of the working capital adjustment, resulting in a refund of $1.0 million. CSP Technologies contributed net sales of $48.9 million and pretax loss of $10.2 million for the year ended December 31, 2018. Sales of $33.9 million and $15.0 million were reported in the Pharma and Food + Beverage segments, respectively, for the year ended December 31, 2018. Pretax loss of $10.3 million and pretax income of $0.1 million were reported in the Pharma and Food + Beverage segments, respectively, for the year ended December 31, 2018. Included in pretax income is $14.1 million of fair value adjustment amortization for inventory sold during 2018. For the year ended December 31, 2019, we recognized $3.4 million in transaction costs related to the acquisitions of Noble, Nanopharm and Gateway. For the year ended December 31, 2018, we recognized $9.0 million in transaction costs related to the acquisition of CSP Technologies. These costs are reflected in the selling, research & development and administration section of the Consolidated Statements of Income and within acquisition-related costs as disclosed in Note 18 – Segment Information. The following table summarizes the assets acquired and liabilities assumed as of the acquisition date at estimated fair value. 2019 2018 Assets Cash and equivalents $ 3,427 $ 24,053 Accounts receivable 3,504 20,847 Inventories — 42,169 Prepaid and other 2,478 3,995 Property, plant and equipment 4,267 99,194 Goodwill 59,143 278,020 Intangible assets 52,980 177,120 Other miscellaneous assets 430 1,039 Liabilities Current maturities of long-term obligations — 129 Accounts payable, accrued and other liabilities 5,388 31,989 Long-term obligations — 6,037 Deferred income taxes 2,592 38,442 Retirement and deferred compensation plans — 1,038 Deferred and other non-current liabilities 1,598 15,344 Net assets acquired $ 116,651 $ 553,458 The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date: 2019 2018 Weighted-Average Estimated Weighted-Average Estimated Useful Life Fair Value Useful Life Fair Value (in years) of Asset (in years) of Asset Acquired technology 8 $ 9,160 12 $ 46,700 Customer relationships 11 39,379 16 113,300 Trademarks and trade names 4 2,457 9 14,600 License agreements and other 1 1,984 11 2,520 Total $ 52,980 $ 177,120 Goodwill in the amount of $59.1 million and $278.0 million was recorded related to the 2019 and 2018 acquisitions, respectively. For 2019, $59.1 million is included in the Pharma segment and, for 2018, $174.3 million and $103.7 million is included in the Pharma and Food + Beverage segments, respectively. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of leveraging our commercial presence in selling the Noble, Nanopharm, Gateway and CSP Technologies lines of products in markets where they did not previously operate and the abilities of the acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For 2019 acquisitions, goodwill of $29.6 million will be deductible for tax purposes. For the 2018 acquisitions, we do not expect any of the goodwill will be deductible for tax purposes. Pro forma results of operations for 2019 acquisitions have not been presented as the effects of these business combinations individually and in aggregate were not material to the consolidated results of operations. The unaudited pro forma results presented below include the effects of the CSP Technologies acquisition as if it had occurred as of January 1, 2017. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as intangible asset amortization, fair value adjustments for inventory and financing costs related to the change in our debt structure. The 2018 pro forma earnings were adjusted to exclude $16.7 million after tax ($ 22.0 million pretax) of transaction and other costs. The aforementioned costs include compensation, consulting, legal and advisory fees. The 2018 pro forma earnings were also adjusted to exclude $10.9 million after tax ($ 14.1 million pretax) of nonrecurring expense related to the fair value adjustment to acquisition-date inventory. The 2017 pro forma earnings were adjusted to include these adjustments. The pro forma results do not include any synergies or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been completed on the dates indicated. Years Ended December 31, 2018 2017 Net Sales $ 2,857,765 $ 2,605,095 Net Income Attributable to AptarGroup Inc. 208,717 230,753 Net Income per common share — basic 3.34 3.70 Net Income per common share — diluted 3.21 3.57 On May 1, 2018, we acquired 100% of the common stock of Reboul, a French manufacturer specializing in stamping, decorating and assembling metal and plastic packaging for the cosmetics and luxury markets, for an initial purchase price of approximately $3.5 million (net of $112 thousand of cash acquired) (the “Reboul Acquisition”). The results of Reboul’s operations have been included in the consolidated financial statements within our Beauty + Home segment since the date of acquisition. As part of the Reboul Acquisition, we were obligated to pay to the selling shareholders of Reboul certain contingent consideration based on 2018 EBITDA as defined in the purchase agreement. These targets were not achieved and we did not pay any contingent consideration. Subsequent to year end, on February 13, 2020, we entered into a securities purchase agreement to acquire 100% of the membership interests of Fusion Packaging I, LP (“Fusion”), contingent on the closing date of the transaction. Fusion, based in Dallas, TX, is a global leader in the design, engineering, manufacturing and distribution of luxury packaging for the beauty industry. The transaction is subject to customary regulatory approvals and other customary closing conditions. The purchase will be funded with available cash on hand and/or borrowings under our revolving credit facility. Asset Acquisition On August 2, 2019, we completed our asset acquisition (the “Bapco Acquisition”) of the remaining 80% ownership interest in the capital stock of Bapco Closures Holdings Limited (“Bapco”), for $3.8 million (net of $2.9 million of cash acquired). The 20% ownership investment previously held in Bapco is now included within the intangible assets acquired. Bapco, located in Horesell, UK, provides innovative closures sealing technology that provides package integrity and tamper evidence. The results of Bapco’s operations have been included in the Condensed Consolidated Financial Statements within our Food + Beverage segment since the date of acquisition. Equity and Other Investments On October 1, 2019, we entered into a strategic definitive agreement to acquire 49% of the equity interests in three related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY, (collectively referred to as “BTY”), contingent on the settlement date of the transaction. We have a call option to acquire an additional 26% to 31% of BTY’s equity interests following the initial lock-up period of 5 years based on a predetermined formula. Subsequent to the second lock-up period, which ends 3 years subsequent to the initial lock-up period, we have a call option to acquire the remaining equity interests of BTY based on a predetermined formula. Additionally, the selling shareholders of BTY have a put option for the remaining equity interest to be acquired by Aptar based on a predetermined formula. The BTY entities are leading Chinese manufacturers of high quality, decorative metal components, metal-plastic sub-assemblies, and complete color cosmetics packaging solutions for the beauty industry. Subsequent to the year ended December 31, 2019, on January 1, 2020 the transaction closed for an approximate purchase price of $32 million for our 49% share. During August 2019, we also invested an aggregate amount of $3.5 million in two preferred equity investments in sustainability companies that are accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. There were no indications of impairment nor were there any changes from observable price changes noted in the three months ended December 31, 2019. In May 2018, we invested $10.0 million in preferred equity stock of Reciprocal Labs Corporation, doing business as Propeller Health, consistent with measurement alternative guidance described in Note 1 above. No impairment charge was recorded during 2018 against this investment. We recorded a gain of approximately $6.5 million during the fourth quarter of 2018 by adjusting the carrying amount to its expected sales proceeds as this investment was subsequently sold during January 2019. |
RESTRUCTURING INITIATIVES
RESTRUCTURING INITIATIVES | 12 Months Ended |
Dec. 31, 2019 | |
RESTRUCTURING INITIATIVES. | |
RESTRUCTURING INITIATIVES | NOTE 21 RESTRUCTURING INITIATIVES In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan will be the Beauty + Home segment; however, certain global general and administrative functions will also be addressed. During 2019 and 2018, we recognized approximately $20.5 million and $63.8 million of restructuring costs related to this plan, respectively. Using current exchange rates, we expect total implementation costs of approximately $110 million for these initiatives. The cumulative expense incurred to date was $86.5 million. We also anticipate making capital investments related to the transformation plan of approximately $55 million, of which the $38 million has been incurred to date. As of December 31, 2019 we have recorded the following activity associated with the transformation plan: Beginning Net Charges Ending Reserve at for the Year Interest and Reserve at 12/31/2018 Ended 12/31/2019 Cash Paid FX Impact 12/31/2019 Employee severance $ 3,934 $ 8,104 $ (4,813) $ (135) $ 7,090 Professional fees and other costs 11,101 12,368 (19,795) (65) 3,609 Totals $ 15,035 $ 20,472 $ (24,608) $ (200) $ 10,699 |
QUARTERLY DATA (UNAUDITED)
QUARTERLY DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY DATA (UNAUDITED) | |
QUARTERLY DATA (UNAUDITED) | NOTE 22 QUARTERLY DATA (UNAUDITED) Quarterly results of operations and per share information for the years ended December 31, 2019 and 2018 are as follows: Quarter Total First Second Third Fourth for Year Year Ended December 31, 2019: Net sales $ 744,460 $ 742,661 $ 701,278 $ 671,333 $ 2,859,732 Gross profit (1) 233,841 231,739 215,222 193,588 874,390 Net Income 62,999 73,921 56,769 48,538 242,227 Net Income Attributable to AptarGroup, Inc. 63,004 73,915 56,750 48,533 242,202 Per Common Share — 2019: Net Income Attributable to AptarGroup, Inc. Basic $ 1.00 $ 1.16 $ .89 $ .76 $ 3.81 Diluted .96 1.12 .85 .73 3.66 Average number of shares outstanding: Basic 62,964 63,471 64,010 63,835 63,574 Diluted 65,349 66,232 66,702 66,192 66,150 Year Ended December 31, 2018: Net sales $ 703,350 $ 710,608 $ 665,775 $ 685,028 $ 2,764,761 Gross profit (1) 209,171 209,018 192,544 184,775 795,508 Net Income 59,288 55,781 39,022 40,675 194,766 Net Income Attributable to AptarGroup, Inc. 59,300 55,775 38,996 40,674 194,745 Per Common Share — 2018: Net Income Attributable to AptarGroup, Inc. Basic $ .95 $ .89 $ .63 $ .65 $ 3.12 Diluted .92 .86 .60 .62 3.00 Average number of shares outstanding: Basic 62,128 62,402 62,378 62,834 62,437 Diluted 64,414 64,850 65,129 65,344 64,958 (1) Gross profit is defined as net sales less cost of sales and depreciation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 23 SUBSEQUENT EVENTS On January 1, 2020, the BTY transaction closed for an approximate purchase price of $32 million for our 49% share. Refer to Note 20- Acquisitions for further details on the investment. On February 13, 2020, we entered into a securities purchase agreement to acquire 100% of the membership interests of Fusion. Refer to Note 20 – Acquisitions for further details on the acquisition. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | AptarGroup, Inc. SCHEDULE II – VALUATION AND QUALIFYING ACCOUNT S For the years ended December 31, 2019, 2018 and 2017 Dollars in thousands Balance at Charged to Charged Deductions Balance Beginning Costs and to Other from at End of Of Period Expenses Accounts Reserve (a) Period 2019 Allowance for doubtful accounts $ 3,541 $ 782 $ — $ (697) $ 3,626 Deferred tax valuation allowance 11,189 12,058 1,508 (1,435) 23,320 2018 Allowance for doubtful accounts $ 3,161 $ 923 $ — $ (543) $ 3,541 Deferred tax valuation allowance 5,414 4,230 2,604 (1,059) 11,189 2017 Allowance for doubtful accounts $ 2,989 $ 235 $ — $ (63) $ 3,161 Deferred tax valuation allowance 4,070 3,640 — (2,296) 5,414 (a) Write-off accounts considered uncollectible, net of recoveries and foreign currency impact adjustments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain previously reported amounts have been reclassified to conform to the current period presentation. AptarGroup’s organizational structure consists of three market-focused business segments which are Beauty + Home, Pharma and Food + Beverage. This is a strategic structure which allows us to be more closely aligned with our customers and the markets in which they operate. In late 2017, Aptar began a business transformation plan to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness (see Note 21 – Restructuring Initiatives for further details). The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also addressed. During 2019, 2018 and 2017, we recognized approximately $20.5 million, $63.8 million and $2.2 million, respectively, of restructuring costs related to this plan. During the quarter ended June 30, 2018, primarily based on published estimates which indicate that Argentina's three-year cumulative inflation rate has exceeded 100%, we concluded that Argentina has become a highly inflationary economy. Beginning July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiaries. We have changed the functional currency from the Argentinian peso to the U.S. dollar. Local currency monetary assets and liabilities were remeasured into U.S. dollars using exchange rates as of the latest balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in net earnings. During the last half of 2018, we recognized approximately $0.8 million of currency gains due to these changes. Our Argentinian operations contributed approximately less than 2.0% of consolidated net assets and revenues at and for the year ended December 31, 2019. |
ACCOUNTING ESTIMATES | ACCOUNTING ESTIMATES The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
CASH MANAGEMENT | CASH AND CASH EQUIVALENTS We consider all investments that are readily convertible to known amounts of cash with an original maturity of three months or less when purchased to be cash equivalents. |
INVENTORIES | INVENTORIES Inventories are stated at lower of cost or net realizable value. Costs included in inventories are raw materials, direct labor and manufacturing overhead. |
INVESTMENTS IN EQUITY SECURITIES | INVESTMENTS IN EQUITY SECURITIES We account for our 20% to 50% owned investments using the equity method. Equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value. Any related changes in fair value is recognized in net income unless the investments qualify for a practicality exception. In May 2018, we invested $10.0 million in preferred equity stock of Reciprocal Labs Corporation, doing business as Propeller Health. During 2018, we increased the value of this investment by approximately $6.5 million due to fair value inputs. This investment was ultimately sold during January 2019 for an amount of $16.5 million (see Note 20 – Acquisitions for further details). During August 2019, we also invested an aggregate amount of $3.5 million in two preferred equity investments that are accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. There were no indications of impairment nor were there any changes from observable price changes noted for the year ended December 31, 2019. There were no dividends received from affiliated companies in 2019, 2018 and 2017. |
PROPERTY AND DEPRECIATION | PROPERTY AND DEPRECIATION Properties are stated at cost. Depreciation is determined on a straight-line basis over the estimated useful lives for financial reporting purposes and accelerated methods for income tax reporting. Generally, the estimated useful lives are 10 to 40 years for buildings and improvements and 3 to 15 years for machinery and equipment. |
FINITE-LIVED INTANGIBLE ASSETS | FINITE-LIVED INTANGIBLE ASSETS Finite-lived intangibles, consisting of patents, acquired technology, customer relationships, trademarks and trade names and license agreements acquired in purchase transactions, are capitalized and amortized over their useful lives which range from 1 to 20 years. |
GOODWILL | GOODWILL The Company has historically evaluated the excess of purchase price over the fair value of the net assets acquired (“goodwill”) for impairment annually as of December 31 or more frequently if impairment indicators arose in accordance with Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other.” In the fourth quarter of 2019, the Company changed the date of its annual assessment of goodwill to October 1 for all reporting units. The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as the new date of the assessment better aligns with the Company’s budgeting process and will create a more efficient and timely process surrounding the impairment tests. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge. The Company has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each October 1 of prior reporting periods without the use of hindsight. As such, the Company prospectively applied the change in annual goodwill impairment testing date from October 1, 2019. We believe that the accounting estimates related to determining the fair value of our reporting units is a critical accounting estimate because: (1) it is highly susceptible to change from period to period because it requires management to make assumptions about the future cash flows for each reporting unit over several years, and (2) the impact that recognizing an impairment would have on the assets reported on our balance sheet as well as our results of operations could be material. Management’s determination of the fair value of our reporting units, based on future cash flows for the reporting units, requires significant judgment and the use of estimates and assumptions related to projected revenue growth rates, the terminal growth factor, as well as the discount rate. Actual cash flows in the future may differ significantly from those forecasted today. The estimates and assumptions for future cash flows and its impact on the impairment testing of goodwill is a critical accounting estimate. Management believes goodwill in purchase transactions has continuing value. Goodwill is not amortized and must be tested annually, or more frequently as circumstances dictate, for impairment. The annual goodwill impairment test may first consider qualitative factors to determine whether it is more likely than not (i.e., greater than 50 percent chance) that the fair value of a reporting unit is less than its book value. This is sometimes referred to as the “step zero” approach and is an optional step in the annual goodwill impairment analysis. Management has performed this qualitative assessment as of October 1, 2019 for each of our reporting units. Based on our review of macroeconomic, industry, and market events and circumstances as well as the overall financial performance of the reporting units, we determined that it was more likely than not that the fair value of these reporting units was greater than their carrying amounts. During the third quarter of 2019, we performed a separate quantitative impairment assessment using a discounted cash flow analysis of the Active Packaging reporting unit, which was formed as a result of the CSP Technologies Acquisition in the third quarter of 2018. We calculated the fair value of the Active Packaging reporting unit and compared it with the associated carrying value (the “step one” approach) as of July 1, 2019. Based on this quantitative analysis, the fair value of the reporting unit exceeded the carrying value and therefore no impairment loss was recognized. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and finite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. |
DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES Derivative financial instruments are recorded in the Consolidated Balance Sheets at fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded in each period in earnings or other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction. |
RETIREMENT OF COMMON STOCK | RETIREMENT OF COMMON STOCK During 2019, we repurchased 779 thousand shares of common stock, all of which were returned to treasury stock. During 2018, we repurchased 668 thousand shares of common stock, of which 623 thousand shares were immediately retired. Common stock was reduced by the number of shares retired at $0.01 par value per share. We allocate the excess purchase price over par value between additional paid-in capital and retained earnings. |
RESEARCH & DEVELOPMENT EXPENSES | RESEARCH & DEVELOPMENT EXPENSES Research and development costs, net of any customer funded research and development or government research and development credits, are expensed as incurred. These costs amounted to $82.8 million, $75.3 million and $68.2 million in 2019, 2018 and 2017, respectively. |
INCOME TAXES | INCOME TAXES We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create timing differences between the tax basis of an asset or liability and its reported amount in the financial statements, an appropriate provision for deferred income taxes is made. All of our non-U.S. earnings are subject to U.S. taxation, either from the transition tax enacted in the U.S. by the Tax Cuts and Jobs Act (“TCJA”) on accumulated non-U.S. earnings as of the end of 2017 or the global intangible low-taxed income (“GILTI”) provisions on non-U.S. earnings thereafter. We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company. We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition. See Note 6 – Income Taxes for more information. |
TRANSLATION OF FOREIGN CURRENCIES | TRANSLATION OF FOREIGN CURRENCIES The functional currencies of the majority of our foreign operations are the local currencies. Assets and liabilities of our foreign operations are translated into U.S. dollars at the rates of exchange on the balance sheet date. Sales and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are accumulated in a separate section of Stockholders’ Equity. Realized and unrealized foreign currency transaction gains and losses are reflected in income, as a component of miscellaneous income and expense, and represented losses of $1.7 million, $1.7 million and $5.0 million in 2019, 2018 and 2017, respectively. |
STOCK BASED COMPENSATION | STOCK-BASED COMPENSATION Accounting standards require the application of the non-substantive vesting approach which means that an award is fully vested when the employee’s retention of the award is no longer contingent on providing future service. Under this approach, compensation costs are recognized over the requisite service period of the award instead of ratably over the vesting period stated in the grant. As such, costs are recognized immediately if the employee is retirement eligible on the date of grant or over the period from the date of grant until retirement eligibility if retirement eligibility is reached before the end of the vesting period stated in the grant. See Note 16 – Stock-Based Compensation for more information. |
REVENUE RECOGNITION | REVENUE RECOGNITION At inception of customer contracts, we assess the goods and services promised in order to identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, we allocate the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied (i.e., when the customer obtains control of the good or service). The majority of our revenues are derived from product and tooling sales; however, we also receive revenues from service, license, exclusivity and royalty arrangements, which are considered insignificant. See specific discussions about methods of accounting for control transfers of product and tooling sales in Note 2 – Revenue. |
LEASES | LEASES We determine if an arrangement is a lease at inception. Operating lease assets are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities are included in accounts payable accrued and other liabilities in our Consolidated Balance Sheets. Finance leases are included in property, plant and equipment, current maturities of long-term obligations and long-term obligations in our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made as well as initial direct costs incurred and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, we account for the lease and non-lease components as a single lease component. We have elected not to recognize right-of-use assets and lease liabilities that arise from short-term leases (a lease whose term is 12 months or less and does not include a purchase option that we are reasonably certain to exercise). Certain vehicle lease contracts include guaranteed residual value that is considered in the determination of lease classification. The probability of having to satisfy a residual value guarantee is not considered for the purpose of lease classification, but is considered when measuring a lease liability. |
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification. In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases, as our accounting for finance leases remained substantially unchanged. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We adopted the standard on January 1, 2019 using a modified retrospective transition, with the effective date method. Under this method, financial results reported in periods prior to 2019 are not recast. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows companies to carry forward their historical lease classification. We also implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The impact of adoption of the standard to previously reported results is shown below. Balance at Balance at December 31, January 1, 2018 Adjustments 2019 Consolidated Balance Sheets Operating lease right-of-use assets $ — $ 83,222 $ 83,222 Prepaid and other 118,245 (1,383) 116,862 Property, plant and equipment 991,613 5,876 997,489 Current maturities of long-term obligations, net of unamortized debt issuance costs 62,678 2,631 65,309 Accounts payable, accrued and other liabilities 525,199 20,508 545,707 Operating lease liabilities — 61,331 61,331 Long-term obligations, net of unamortized debt issuance costs 1,125,993 3,245 1,129,238 In May 2014, the FASB issued ASU 2014-09, which amended the guidance for recognition of revenue from customer contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, we adopted this standard and all the related amendments (the “new revenue standard”) for all contracts. This adoption was accounted for using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the January 1, 2018 opening balance of retained earnings. Comparative information for the prior periods has not been restated and continues to be reported under the accounting standards in effect prior to January 1, 2018. Balance at Balance at December 31, 2017 Adjustment January 1, 2018 Consolidated Balance Sheets Assets Inventories $ 337,216 $ (7,064) $ 330,152 Prepaid and other 109,791 6,411 116,202 Liabilities Accounts payable, accrued and other liabilities 461,579 (5,706) 455,873 Deferred income taxes 20,995 1,292 22,287 Deferred and other non-current liabilities 5,608 824 6,432 Stockholders’ Equity Retained earnings 1,301,147 2,937 1,304,084 A majority of our sales revenue continues to be recognized when products are shipped from our manufacturing facilities. For certain custom product and tooling sales where revenue was previously recognized when the products were shipped, we now recognize revenue over the time required to manufacture the product or build the tool in accordance with the new revenue standard. We also have certain extended warranty contracts, which under the new standard are considered a separate performance obligation and are required to be deferred and recognized into revenue over the life of the agreement. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our consolidated statements of income and balance sheets is as follows: For the Year Ended December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Statements of Income Net Sales Beauty + Home $ 1,426,382 $ 1,424,701 $ 1,681 Pharma 954,652 954,497 155 Food + Beverage 383,727 385,001 (1,274) Costs and Expenses Cost of sales (exclusive of depreciation and amortization) 1,812,961 1,811,290 1,671 Provision for income taxes 71,254 71,541 (287) Net income 194,766 195,588 (822) December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Balance Sheets Assets Inventories $ 381,110 $ 391,315 $ (10,205) Prepaid and other 118,245 108,490 9,755 Liabilities Accounts payable, accrued and other liabilities 525,199 529,168 (3,969) Deferred income taxes 53,917 52,912 1,005 Deferred and other non-current liabilities 23,465 23,066 399 Stockholders’ Equity Retained earnings 1,371,826 1,369,711 2,115 In January 2016, the FASB issued ASU 2016-01, which provides guidance on the classification and measurement of financial assets and liabilities (equity securities and financial liabilities) under the fair value option and the presentation and disclosure requirements for financial instruments. In February 2018, ASU 2018-03 was issued to clarify certain aspects of the guidance issued in January 2016. The guidance modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any related changes in fair value in net income unless the investments qualify for the new practicality exception. A measurement alternative exists for those equity investments that do not have a readily determinable fair value. These investments may be measured at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The standard also includes a new impairment model for equity investments without readily determinable fair values. The new model is a single-step model under which we are required to perform a qualitative assessment each reporting period to identify impairment. When a qualitative assessment indicates that an impairment exists, we will estimate the fair value of the investment and recognize in current earnings an impairment loss equal to the difference between the fair value and the carrying amount of the equity investment. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. We adopted the requirements of this standard during the first quarter of 2018. In November 2016, the FASB issued ASU 2016-18, which provides guidance to address the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments in this standard require that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. We adopted the requirements of this standard during the first quarter of 2018 and appropriate disclosures are included on the statement of cash flows to the extent applicable. In February 2018, the FASB issued ASU 2018-02, which provides guidance on the reclassification of certain tax effects from accumulated other comprehensive income. This guidance allows for the reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018. We elected to early adopt this standard in the fourth quarter of 2018. As part of this adoption, we elected to reclassify $6.7 million of stranded income tax effects of the TCJA from accumulated other comprehensive income to retained earnings at the beginning of the fourth quarter of 2018. Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Standards Update 2014-09 | Restatement of beginning balances | |
Summary of impacts of adoption of recent accounting pronouncements | Balance at Balance at December 31, 2017 Adjustment January 1, 2018 Consolidated Balance Sheets Assets Inventories $ 337,216 $ (7,064) $ 330,152 Prepaid and other 109,791 6,411 116,202 Liabilities Accounts payable, accrued and other liabilities 461,579 (5,706) 455,873 Deferred income taxes 20,995 1,292 22,287 Deferred and other non-current liabilities 5,608 824 6,432 Stockholders’ Equity Retained earnings 1,301,147 2,937 1,304,084 |
Accounting Standards Update 2014-09 | Cumulative effect of change | |
Summary of impacts of adoption of recent accounting pronouncements | For the Year Ended December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Statements of Income Net Sales Beauty + Home $ 1,426,382 $ 1,424,701 $ 1,681 Pharma 954,652 954,497 155 Food + Beverage 383,727 385,001 (1,274) Costs and Expenses Cost of sales (exclusive of depreciation and amortization) 1,812,961 1,811,290 1,671 Provision for income taxes 71,254 71,541 (287) Net income 194,766 195,588 (822) December 31, 2018 Balances Without Effect of As Adoption of Change Reported ASC 606 Higher/(Lower) Consolidated Balance Sheets Assets Inventories $ 381,110 $ 391,315 $ (10,205) Prepaid and other 118,245 108,490 9,755 Liabilities Accounts payable, accrued and other liabilities 525,199 529,168 (3,969) Deferred income taxes 53,917 52,912 1,005 Deferred and other non-current liabilities 23,465 23,066 399 Stockholders’ Equity Retained earnings 1,371,826 1,369,711 2,115 |
Accounting Standards Update 2016-02 | Restatement of beginning balances | |
Summary of impacts of adoption of recent accounting pronouncements | Balance at Balance at December 31, January 1, 2018 Adjustments 2019 Consolidated Balance Sheets Operating lease right-of-use assets $ — $ 83,222 $ 83,222 Prepaid and other 118,245 (1,383) 116,862 Property, plant and equipment 991,613 5,876 997,489 Current maturities of long-term obligations, net of unamortized debt issuance costs 62,678 2,631 65,309 Accounts payable, accrued and other liabilities 525,199 20,508 545,707 Operating lease liabilities — 61,331 61,331 Long-term obligations, net of unamortized debt issuance costs 1,125,993 3,245 1,129,238 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE. | |
Schedule of revenue by segment by geographic area | For the Year Ended December 31, 2019 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 792,255 $ 310,411 $ 160,048 $ 90,000 $ 1,352,714 Pharma 729,882 297,871 26,344 36,954 1,091,051 Food + Beverage 116,332 228,486 33,996 37,153 415,967 Total $ 1,638,469 $ 836,768 $ 220,388 $ 164,107 $ 2,859,732 For the Year Ended December 31, 2018 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 816,359 $ 334,881 $ 178,392 $ 96,750 $ 1,426,382 Pharma 696,079 196,928 25,485 36,160 954,652 Food + Beverage 115,040 194,527 31,742 42,418 383,727 Total $ 1,627,478 $ 726,336 $ 235,619 $ 175,328 $ 2,764,761 |
Schedule of opening and closing balances of contract assets and contract liabilities | Balance as of Balance as of Increase/ December 31, 2018 December 31, 2019 (Decrease) (opening) (closing) Contract asset (current) $ 15,858 $ 16,245 $ 387 Contract asset (long-term) $ — $ — $ — Contract liability (current) $ 68,134 $ 79,305 $ 11,171 Contract liability (long-term) $ 11,261 $ 9,779 $ (1,482) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
Schedule of inventories, by component | 2019 2018 Raw materials $ 111,653 $ 110,720 Work in process 123,750 131,091 Finished goods 140,392 139,299 Total $ 375,795 $ 381,110 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Beauty + Food + Corporate Home Pharma Beverage & Other Total Balance as of December 31, 2017 Goodwill $ 223,947 $ 203,069 $ 16,871 $ 1,615 $ 445,502 Accumulated impairment losses — — — (1,615) (1,615) $ 223,947 $ 203,069 $ 16,871 $ — $ 443,887 Acquisition 5,565 174,343 103,678 — 283,586 Reallocation, net — (8,048) 8,048 — — Foreign currency exchange effects (5,579) (9,481) (318) — (15,378) Balance as of December 31, 2018 Goodwill $ 223,933 $ 359,883 $ 128,279 $ 1,615 $ 713,710 Accumulated impairment losses — — — (1,615) (1,615) $ 223,933 $ 359,883 $ 128,279 $ — $ 712,095 Acquisition — 57,934 — — 57,934 Foreign currency exchange effects (2,275) (4,167) (126) — (6,568) Balance as of December 31, 2019 Goodwill $ 221,658 $ 413,650 $ 128,153 $ 1,615 $ 765,076 Accumulated impairment losses — — — (1,615) (1,615) $ 221,658 $ 413,650 $ 128,153 $ — $ 763,461 |
Summary of amortized intangible assets | 2019 2018 Weighted Average Gross Gross Amortization Period Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents 7.2 $ 2,804 (1,318) $ 1,486 $ 5,427 $ (5,294) $ 133 Acquired technology 13.0 100,511 (25,430) 75,081 92,389 (18,304) 74,085 Customer relationships 13.6 217,934 (33,924) 184,010 179,597 (20,439) 159,158 Trademarks and trade names 7.0 35,015 (11,003) 24,012 21,243 (5,914) 15,329 License agreements and other 10.3 16,153 (9,658) 6,495 13,852 (7,653) 6,199 Total intangible assets 12.6 $ 372,417 $ (81,333) $ 291,084 $ 312,508 $ (57,604) $ 254,904 |
Schedule of future estimated amortization expense | 2020 $ 31,135 2021 29,582 2022 29,343 2023 29,171 2024 and thereafter 171,853 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES. | |
Components of accounts payable and accrued liabilities | 2019 2018 Accounts payable, principally trade $ 192,739 $ 164,528 Accrued employee compensation costs 163,839 168,349 Customer deposits and other unearned income 86,820 67,775 Other accrued liabilities 129,630 124,547 Total $ 573,028 $ 525,199 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of income before income taxes | Years Ended December 31, 2019 2018 2017 United States $ 94,612 $ 34,404 $ 36,139 International 247,457 231,616 258,686 Total $ 342,069 $ 266,020 $ 294,825 |
Components of provision (benefit) for income taxes | Years Ended December 31, 2019 2018 2017 Current: U.S. Federal $ 2,129 $ 10,273 $ (342) State/Local 883 877 230 International 88,084 83,456 72,670 $ 91,096 $ 94,606 $ 72,558 Deferred: U.S. Federal/State $ 4,670 $ (17,019) $ 2,570 International 4,076 (6,333) (332) $ 8,746 $ (23,352) $ 2,238 Total $ 99,842 $ 71,254 $ 74,796 |
Schedule of reconciliation of actual income tax provision and the tax provision computed by applying statutory federal income tax rate | Years Ended December 31, 2019 2018 2017 Income tax at statutory rate $ 71,835 $ 55,864 $ 103,189 State income taxes (benefits), net of federal (tax) benefit 2,622 (1,516) (2,620) Investment incentives (2,530) (1,900) (1,900) Tax resolutions (1,915) (3,400) (5,188) Excess tax benefits from share-based compensation (12,520) (10,800) (10,383) Deferred benefits from tax rate changes — (2,800) (5,055) U.S. GILTI and BEAT (1,485) 5,625 — U.S. tax reform - transition tax — (2,570) 31,575 Results of forward contract — — (23,883) Valuation allowance 10,623 3,170 1,344 Rate differential on earnings of foreign operations 29,807 26,424 (16,097) Other items, net 3,405 3,157 3,814 Actual income tax provision $ 99,842 $ 71,254 $ 74,796 Effective income tax rate 29.2 % 26.8 % 25.4 % |
Components of significant deferred tax assets and liabilities | 2019 2018 Deferred Tax Assets: Net operating loss carryforwards $ 24,941 $ 22,462 Operating and finance leases 25,440 — Pension liabilities 24,925 15,405 Share-based compensation 6,082 10,130 U.S. federal tax credits 8,575 12,045 U.S. state tax credits 7,881 10,186 Vacation and bonus 7,645 6,891 Research and development 7,539 6,945 Inventory 5,993 6,038 Workers compensation 3,835 3,373 Other 16,496 13,985 Total gross deferred tax assets 139,352 107,460 Less valuation allowance (23,320) (11,189) Net deferred tax assets 116,032 96,271 Deferred Tax Liabilities: Acquisition related intangibles 62,851 59,004 Depreciation and amortization 28,284 31,140 Operating and finance leases 27,555 2,034 Other 6,215 10,351 Total gross deferred tax liabilities 124,905 102,529 Net deferred tax (liabilities) assets $ (8,873) $ (6,258) |
Schedule of reconciliation of the beginning and ending amount of income tax uncertainties | 2019 2018 2017 Balance at January 1 $ 3,559 $ 3,080 $ 6,356 Increases based on tax positions for the current year 412 360 370 Increases based on tax positions of prior years 663 610 1,562 Settlements (558) (491) (4,874) Lapse of statute of limitations (429) — (334) Balance at December 31 $ 3,647 $ 3,559 $ 3,080 |
Summary of major tax jurisdictions the Company files in, with the years still subject to income tax examinations | Tax Years Major Tax Subject to Jurisdiction Examination United States — Federal 2014-2019 United States — State 2010-2019 France 2016-2019 Germany 2015-2019 Italy 2014-2019 China 2010-2019 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEBT | |
Schedule of short-term debt | 2019 2018 Revolving credit facility $ 25,000 $ 79,000 Notes payable 1,436 4,544 Overdrafts 17,823 17,749 $ 44,259 $ 101,293 |
Schedule of long-term obligations | At December 31, 2019, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90% , due in monthly and annual installments through 2028 $ 19,220 $ — $ 19,220 Senior unsecured notes 3.2% , due in 2022 75,000 64 74,936 Senior unsecured debts 3.2% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 390 167,610 Senior unsecured notes 3.5% , due in 2023 125,000 144 124,856 Senior unsecured notes 1.0% , due in 2023 112,170 356 111,814 Senior unsecured notes 3.4% , due in 2024 50,000 63 49,937 Senior unsecured notes 3.5% , due in 2024 100,000 144 99,856 Senior unsecured notes 1.2% , due in 2024 224,340 742 223,598 Senior unsecured notes 3.6% , due in 2025 125,000 169 124,831 Senior unsecured notes 3.6% , due in 2026 125,000 169 124,831 Finance Lease Liabilities 29,952 — 29,952 $ 1,153,682 $ 2,241 $ 1,151,441 Current maturities of long-term obligations (65,988) — (65,988) Total long-term obligations $ 1,087,694 $ 2,241 $ 1,085,453 At December 31, 2018, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 16.00% , due in monthly and annual installments through 2028 $ 15,531 $ — $ 15,531 Senior unsecured notes 3.2% , due in 2022 75,000 88 74,912 Senior unsecured debts 4.0% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 224,000 541 223,459 Senior unsecured notes 3.5% , due in 2023 125,000 181 124,819 Senior unsecured notes 1.0% , due in 2023 114,535 432 114,103 Senior unsecured notes 3.4% , due in 2024 50,000 76 49,924 Senior unsecured notes 3.5% , due in 2024 100,000 181 99,819 Senior unsecured notes 1.2% , due in 2024 229,070 904 228,166 Senior unsecured notes 3.6% , due in 2025 125,000 207 124,793 Senior unsecured notes 3.6% , due in 2026 125,000 208 124,792 Capital lease obligations 8,353 — 8,353 $ 1,191,489 $ 2,818 $ 1,188,671 Current maturities of long-term obligations (62,678) — (62,678) Total long-term obligations $ 1,128,811 $ 2,818 $ 1,125,993 |
Schedule of covenants on revolving credit facility and corporate long-term obligations | Requirement Level at December 31, 2019 Consolidated Leverage Ratio (1) Maximum of 3.50 to 1.00 1.71 to 1.00 Consolidated Interest Coverage Ratio (1) Minimum of 3.00 to 1.00 16.21 to 1.00 (1) Definitions of ratios are included as part of the revolving credit facility agreement and the private placement agreements . |
LEASE COMMITMENTS (Tables)
LEASE COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LEASE COMMITMENTS | |
Schedule of components of lease expense | Year Ended December 31, 2019 Operating lease cost $ 23,410 Finance lease cost: Amortization of right-of-use assets $ 4,217 Interest on lease liabilities 1,353 Total finance lease cost $ 5,570 Short-term lease and variable lease costs $ 8,629 |
Schedule of supplemental cash flow information related to leases | Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21,872 Operating cash flows from finance leases 1,245 Financing cash flows from finance leases 4,730 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 15,226 Finance leases 15,957 |
Schedule of supplemental balance sheet information related to leases | December 31, 2019 Operating Leases Operating lease right-of-use assets $ 72,377 Accounts payable, accrued and other liabilities $ 16,578 Operating lease liabilities 55,276 Total operating lease liabilities $ 71,854 Finance Leases Property, plant and equipment, gross $ 47,020 Accumulated depreciation (4,271) Property, plant and equipment, net $ 42,749 Current maturities of long-term obligations, net of unamortized debt issuance cost $ 4,318 Long-term obligations, net of unamortized debt issuance cost 25,634 Total finance lease liabilities $ 29,952 Weighted Average Remaining Lease Term (in years) Operating leases 6.1 Finance leases 7.0 Weighted Average Discount Rate Operating leases 5.05 % Finance leases 5.13 % |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2019, were as follows: Operating Finance Leases Leases Year 1 $ 19,652 $ 5,655 Year 2 15,411 4,787 Year 3 10,740 3,870 Year 4 9,365 3,099 Year 5 6,998 2,658 Thereafter 22,331 18,051 Total lease payments 84,497 38,120 Less imputed interest (12,643) (8,168) Total $ 71,854 $ 29,952 Maturities of lease liabilities as of December 31, 2018 under the old lease accounting standard were as follows: Operating Capital Leases Leases Year 1 $ 26,512 $ 1,828 Year 2 21,386 1,653 Year 3 16,529 1,546 Year 4 12,549 1,160 Year 5 10,225 880 Thereafter 21,932 3,827 Total lease payments $ 109,133 10,894 Less imputed interest (2,541) Present value of future lease payments $ 8,353 |
RETIREMENT AND DEFERRED COMPE_2
RETIREMENT AND DEFERRED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
Change in the projected benefit obligation, plan assets at fair value and funded status | Domestic Plans Foreign Plans 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year $ 180,803 $ 198,450 $ 104,911 $ 109,030 Service cost 11,093 11,396 5,921 5,954 Interest cost 7,381 6,878 2,023 1,828 Special termination benefit charge — — 64 62 Plan Amendment — — 18 — Curtailment/Settlement — — (271) (1,751) Transfer — — 939 — Business acquired — — — 1,937 Prior service cost — — (451) 35 Actuarial loss (gain) 39,209 (23,510) 13,575 (3,743) Benefits paid (11,211) (12,411) (4,130) (3,288) Foreign currency translation adjustment — — (2,109) (5,153) Benefit obligation at end of year $ 227,275 $ 180,803 $ 120,490 $ 104,911 Domestic Plans Foreign Plans 2019 2018 2019 2018 Change in plan assets: Fair value of plan assets at beginning of year $ 169,958 $ 169,600 $ 68,992 $ 73,384 Actual return on plan assets 29,618 (7,642) 3,851 (487) Employer contribution 436 20,411 6,542 2,780 Benefits paid (11,211) (12,411) (4,130) (3,288) Transfer — — 359 — Foreign currency translation adjustment — — (1,425) (3,397) Fair value of plan assets at end of year $ 188,801 $ 169,958 $ 74,189 $ 68,992 Funded status at end of year $ (38,474) $ (10,845) $ (46,301) $ (35,919) |
Schedule of funded status amounts recognized in the Consolidated Balance Sheet | Domestic Plans Foreign Plans 2019 2018 2019 2018 Non-current assets $ — $ 207 $ 938 $ 500 Current liabilities (449) (430) (44) (8) Non-current liabilities (38,025) (10,622) (47,195) (36,411) $ (38,474) $ (10,845) $ (46,301) $ (35,919) |
Schedule of amounts not recognized as components of periodic benefit cost that are recognized in accumulated other comprehensive loss | Domestic Plans Foreign Plans 2019 2018 2019 2018 Net actuarial loss $ 68,789 $ 48,776 $ 40,442 $ 29,761 Net prior service cost — — 3,774 4,656 Tax effects (15,821) (17,876) (14,040) (4,855) $ 52,968 $ 30,900 $ 30,176 $ 29,562 |
Schedule of changes in benefit obligations and plan assets recognized in other comprehensive income | Domestic Plans 2019 2018 2017 Current year actuarial (loss) gain $ (21,970) $ 4,611 $ (12,593) Amortization of net loss 1,957 4,873 3,205 $ (20,013) $ 9,484 $ (9,388) Foreign Plans 2019 2018 2017 Current year actuarial (loss) gain $ (11,999) $ 534 $ 2,952 Current year prior service cost 451 (35) (1,399) Transfer Prior service Cost (18) — — Transfer Actuarial (loss) gain (126) — — Recognition due to curtailment — 1,692 — Amortization of net loss 1,444 1,716 1,895 Amortization of prior service cost 449 720 400 $ (9,799) $ 4,627 $ 3,848 |
Schedule of amounts in accumulated other comprehensive loss expected to be recognized as components of periodic benefit cost in the next 12 months | Domestic Plans Foreign Plans Amortization of net loss $ 5,719 $ 2,092 Amortization of prior service cost — 391 $ 5,719 $ 2,483 |
Components of net periodic benefit cost | Domestic Plans 2019 2018 2017 Service cost $ 11,093 $ 11,396 $ 9,706 Interest cost 7,381 6,878 7,010 Expected return on plan assets (12,379) (11,257) (9,880) Amortization of net loss 1,957 4,873 3,205 Net periodic benefit cost $ 8,052 $ 11,890 $ 10,041 Foreign Plans 2019 2018 2017 Service cost $ 5,921 $ 5,954 $ 5,526 Interest cost 2,023 1,828 1,747 Expected return on plan assets (2,366) (2,610) (2,409) Amortization of net loss 1,444 1,716 1,895 Amortization of prior service cost 449 720 400 Net periodic benefit cost $ 7,471 $ 7,608 $ 7,159 Curtailment (246) (59) — Special termination benefit charge 65 62 — Total Net periodic benefit cost $ 7,290 $ 7,611 $ 7,159 |
Schedule of projected benefit obligation ("PBO"), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets | Domestic Plans Foreign Plans 2019 2018 2019 2018 Projected benefit obligation $ 227,275 $ 11,052 $ 92,561 $ 93,029 Accumulated benefit obligation 205,326 9,216 65,062 68,981 Fair value of plan assets 188,801 — 46,371 56,611 |
Schedule of PBO, ABO, and fair value of plan assets for all pension plans with a PBO in excess of plan assets | Domestic Plans Foreign Plans 2019 2018 2019 2018 Projected benefit obligation $ 227,275 $ 11,052 $ 102,310 $ 92,555 Accumulated benefit obligation 205,326 9,216 73,943 68,506 Fair value of plan assets 188,801 — 55,260 56,136 |
Schedule of weighted-average assumptions used to determine benefit obligations and net periodic benefit cost | Domestic Plans Foreign Plans 2019 2018 2017 2019 2018 2017 Weighted-average assumptions used to determine benefit obligations at December 31: Discount rate 3.20 % 4.20 % 3.55 % 1.04 % 1.82 % 1.62 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 3.05 % 3.01 % 3.02 % Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31: Discount rate 4.20 % 3.55 % 4.05 % 1.84 % 1.62 % 1.65 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % 3.69 % 3.66 % 3.66 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 3.05 % 3.02 % 3.00 % |
Schedule of domestic and foreign pension plan weighted-average asset allocations by asset category | Domestic Plans Assets Foreign Plans Assets at December 31, at December 31, 2019 2018 2019 2018 Equity securities 49 % 44 % 4 % 4 % Fixed income securities 29 % 29 % 1 % 1 % Corporate debt securities — — 3 % 3 % Infrastructure 6 % 7 % — — Hedge funds 10 % 10 % — — Money market 1 % 5 % 3 % 1 % Investment Funds — — 89 % 91 % Real estate 5 % 5 % — — Total 100 % 100 % 100 % 100 % |
Summary of fair value of pension plan assets | Domestic Fair Value Measurement Foreign Fair Value Measurement at December 31, 2019 at December 31, 2019 (In Thousands $) Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Cash and Short-term Securities (a) $ 1,988 $ 1,988 $ — $ — $ 2,030 $ 2,030 $ — $ — USD — 1,988 — — — — — — EUR — — — — — 2,012 — — Others — — — — — 18 — — Equity Securities (a) $ 81,997 $ 81,997 — — $ 2,995 $ 2,995 — — U.S. Large Cap Equities — 48,580 — — — — — — U.S. Small Cap Equities — 9,921 — — — — — — International Equities — 23,496 — — — 2,995 — — Fixed Income (a&b) $ 35,898 $ 35,898 — — $ 820 $ 820 — — Corporate debts securities — — — — $ 2,115 $ 2,115 — — Euro Corporate Bonds (a) — — — — — 2,115 — — Investment Funds — — — — $ 66,229 $ 23,797 $ 42,432 — Mutual Funds in Equities (a) — — — — — 4,025 — — Mutual Funds in Bonds (a) — — — — — 18,881 — — Mutual Funds Diversified (a&b) — — — — — 891 42,432 — Total Investments in Fair Value Hierarchy $ 119,883 $ 119,883 $ — $ — $ 74,189 $ 31,757 $ 42,432 $ — Investments at Net Asset Value per Share 68,918 — — — — — — — Total Investments $ 188,801 $ 119,883 $ — $ — $ 74,189 $ 31,757 $ 42,432 $ — Domestic Fair Value Measurement Foreign Fair Value Measurement at December 31, 2018 at December 31, 2018 (In Thousands $) Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Cash and Short-term Securities (a) $ 8,964 $ 8,964 $ — $ — $ 718 $ 718 $ — $ — USD — 8,964 — — — — — — EUR — — — — — 718 — — Equity Securities (a) $ 66,707 $ 66,707 — — $ 2,591 $ 2,591 — — U.S. Large Cap Equities — 38,804 — — — — — — U.S. Small Cap Equities — 7,747 — — — — — — International Equities — 20,156 — — — 2,591 — — Fixed Income (a&b) $ 32,272 $ 32,272 — — $ 717 $ 717 — — Corporate debts securities — — — — $ 2,097 $ 2,097 — — Euro Corporate Bonds (a) — — — — — 2,097 — — Investment Funds — — — — $ 62,869 $ 22,122 $ 40,747 — Mutual Funds in Equities (a) — — — — — 3,339 — — Mutual Funds in Bonds (a) — — — — — 18,060 — — Mutual Funds Diversified (a&b) — — — — — 723 40,747 — Total Investments in Fair Value Hierarchy $ 107,943 $ 107,943 $ — $ — $ 68,992 $ 28,245 $ 40,747 $ — Investments at Net Asset Value per Share 62,015 — — — — — — — Total Investments $ 169,958 $ 107,943 $ — $ — $ 68,992 $ 28,245 $ 40,747 $ — (a) Based on third party quotation from financial institution. (b) Based on observable market transactions. |
Schedule of estimated benefit payments relating to defined benefit plans over the next ten years | Domestic Plans Foreign Plans 2020 $ 11,064 $ 5,382 2021 11,134 2,904 2022 11,665 3,155 2023 12,467 4,676 2024 13,077 6,537 2025 - 2029 74,584 34,386 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Changes in Accumulated Other Comprehensive Income/(Loss) by Component | Foreign Defined Benefit Currency Pension Plans Derivatives Total Balance - December 31, 2016 $ (259,888) $ (59,775) $ (46) $ (319,709) Other comprehensive income (loss) before reclassifications 74,385 (8,944) (11,806) 53,635 Amounts reclassified from accumulated other comprehensive income (loss) — 4,124 8,648 12,772 Net current-period other comprehensive income (loss) 74,385 (4,820) (3,158) 66,407 Balance - December 31, 2017 $ (185,503) $ (64,595) $ (3,204) $ (253,302) Other comprehensive (loss) income before reclassifications (62,898) 5,266 16,624 (41,008) Amounts reclassified from accumulated other comprehensive income (loss) — 5,524 (15,060) (9,536) Net current-period other comprehensive (loss) income (62,898) 10,790 1,564 (50,544) Reclassification of stranded tax effects — (6,658) — (6,658) Balance - December 31, 2018 $ (248,401) $ (60,463) $ (1,640) $ (310,504) Other comprehensive (loss) income before reclassifications (8,723) (25,557) 8,026 (26,254) Amounts reclassified from accumulated other comprehensive income (loss) — 2,873 (8,063) (5,190) Net current-period other comprehensive (loss) income (8,723) (22,684) (37) (31,444) Balance - December 31, 2019 $ (257,124) $ (83,147) $ (1,677) $ (341,948) |
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income | Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Year Ended December 31, 2019 2018 2017 Defined Benefit Pension Plans Amortization of net loss $ 3,401 $ 6,589 $ 5,100 (1) Amortization of prior service cost 449 720 400 (1) 3,850 7,309 5,500 Total before tax (977) (1,785) (1,376) Tax benefit $ 2,873 $ 5,524 $ 4,124 Net of tax Derivatives Changes in treasury locks $ — $ 26 $ 42 Interest Expense Changes in cross currency swap: interest component (4,805) (5,150) (1,526) Interest Expense Changes in cross currency swap: foreign exchange component (3,258) (13,025) 11,911 Miscellaneous, net (8,063) (18,149) 10,427 Total before tax — 3,089 (1,779) Tax benefit $ (8,063) $ (15,060) $ 8,648 Net of tax Total reclassifications for the period $ (5,190) $ (9,536) $ 12,772 (1) These accumulated other comprehensive income components are included in the computation of total net periodic benefit costs, net of tax (see Note 9 - Retirement and Deferred Compensation Plans for additional details). |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheets | Fair Value of Derivative Instruments in the Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018 December 31, 2019 December 31, 2018 Derivatives Derivatives Derivatives not Derivatives not Designated Designated Designated Designated Balance Sheet as Hedging as Hedging as Hedging as Hedging Location Instruments Instruments Instruments Instruments Derivative Assets Foreign Exchange Contracts Prepaid and other $ — $ 206 $ — $ 259 Cross Currency Swap Contract (1) Prepaid and other 2,552 — — — $ 2,552 $ 206 $ — $ 259 Derivative Liabilities Foreign Exchange Contracts Accounts payable, accrued and other liabilities $ — $ 401 $ — $ 331 Cross Currency Swap Contract (1) Accounts payable, accrued and other liabilities — — 1,040 — $ — $ 401 $ 1,040 $ 331 (1) This cross currency swap contract is composed of both an interest component and a foreign exchange component. |
Schedule of Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) | The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Fiscal Years Ended December 31, 2019 and December 31, 2018 Amount of Gain (Loss) Total Amount Amount of Gain (Loss) Location of (Loss) Reclassified from of Affected Derivatives in Cash Recognized in Gain Recognized Accumulated Income Flow Hedging Other Comprehensive in Income on Other Comprehensive Statement Relationships Income on Derivative Derivatives Income on Derivative Line Item 2019 2018 2019 2018 Cross currency swap contract: Interest component $ 5,103 $ 7,014 Interest expense $ 4,805 $ 5,150 $ (35,489) Foreign exchange component 3,258 13,025 Miscellaneous, net 3,258 13,025 1,556 $ 8,361 $ 20,039 $ 8,063 $ 18,175 |
Schedule of Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income | The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income for the Fiscal Years Ended December 31, 2019 and December 31, 2018 Amount of (Loss) Gain Derivatives Not Designated Location of (Loss) Gain Recognized Recognized in Income as Hedging Instruments in Income on Derivatives on Derivatives 2019 2018 Foreign Exchange Contracts Other (Expense) Income: $ (141) $ 652 $ (141) $ 652 |
Schedule of offsetting derivative assets and liabilities | Gross Amounts not Offset Gross Amounts Net Amounts in the Statement of Offset in the Presented in Financial Position Gross Statement of the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description December 31, 2019 Derivative Assets $ 2,758 — $ 2,758 — — $ 2,758 Total Assets $ 2,758 — $ 2,758 — — $ 2,758 Derivative Liabilities $ 401 — $ 401 — — $ 401 Total Liabilities $ 401 — $ 401 — — $ 401 December 31, 2018 Derivative Assets $ 259 — $ 259 — — $ 259 Total Assets $ 259 — $ 259 — — $ 259 Derivative Liabilities $ 1,371 — $ 1,371 — — $ 1,371 Total Liabilities $ 1,371 — $ 1,371 — — $ 1,371 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE | |
Schedule of fair values of financial assets and liabilities | As of December 31, 2019, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 206 $ — $ 206 $ — Cross currency swap contract (1) 2,552 — 2,552 — Total assets at fair value $ 2,758 $ — $ 2,758 $ — Liabilities Foreign exchange contracts (1) $ 401 $ — $ 401 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,331 $ — $ 401 $ 5,930 As of December 31, 2018, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 259 $ — $ 259 $ — Total assets at fair value $ 259 $ — $ 259 $ — Liabilities Foreign exchange contracts (1) $ 331 $ — $ 331 $ — Cross currency swap contract (1) 1,040 — 1,040 — Total liabilities at fair value $ 1,371 $ — $ 1,371 $ — (1) Market approach valuation technique based on observable market transactions of spot and forward rates. |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL STOCK | |
Schedule of number of shares of common stock and treasury stock and the share activity | Common Shares Treasury Shares 2019 2018 2019 2018 Balance at the beginning of the year 67,341,316 66,742,490 4,424,884 4,881,889 Employee option exercises 1,079,841 1,182,547 (367,705) (502,005) Director option exercises 146,083 — — — Restricted stock vestings 41,268 39,691 — — Common stock repurchases — — 778,848 45,000 Common stock repurchased and retired — (623,412) — — Balance at the end of the year 68,608,508 67,341,316 4,836,027 4,424,884 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
STOCK-BASED COMPENSATION | |
Weighted-average assumptions used to estimate fair value of stock options granted | Stock Awards Plans: Years Ended December 31, 2018 2017 Dividend Yield 1.5 % 1.7 % Expected Stock Price Volatility 14.2 % 15.8 % Risk-free Interest Rate 2.8 % 2.2 % Expected Life of Option (years) 6.6 6.7 |
Summary of option activity | Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Options Exercise Price Options Exercise Price Outstanding, January 1, 2019 6,761,055 $ 65.76 155,200 $ 58.13 Granted — — — — Exercised (1,560,047) 57.10 (19,949) 55.99 Forfeited or expired (156,828) 73.15 — — Outstanding at December 31, 2019 5,044,180 $ 68.32 135,251 $ 58.45 Exercisable at December 31, 2019 4,288,542 $ 66.01 135,251 $ 58.45 Weighted-Average Remaining Contractual Term (Years): Outstanding at December 31, 2019 5.4 3.2 Exercisable at December 31, 2019 5.0 3.2 Aggregate Intrinsic Value: Outstanding at December 31, 2019 $ 239,033 $ 7,732 Exercisable at December 31, 2019 $ 212,745 $ 7,732 Intrinsic Value of Options Exercised During the Years Ended: December 31, 2019 $ 87,251 $ 1,172 December 31, 2018 $ 72,951 $ 2,286 December 31, 2017 $ 51,140 $ 1,995 |
Weighted-average assumptions used to estimate fair value of restricted stock units | Year Ended December 31, 2019 2018 Fair value per stock award $ 134.97 $ 128.70 Grant date stock price $ 104.51 $ 89.42 Assumptions: Aptar's stock price expected volatility 16.50 % 12.30 % Expected average volatility of peer companies 31.90 % 27.50 % Correlation assumption 37.40 % 20.20 % Risk-free interest rate 2.19 % 2.42 % Dividend yield assumption 1.30 % 1.43 % |
Summary of restricted stock unit activity | Time-Based RSUs Performance-Based RSUs Weighted Average Weighted Average Units Grant-Date Fair Value Units Grant-Date Fair Value Nonvested at January 1, 2019 261,487 $ 91.78 69,990 $ 111.55 Granted 295,412 97.80 123,246 119.35 Vested (51,433) 88.77 — — Forfeited (24,737) 98.72 (11,556) 117.04 Nonvested at December 31, 2019 480,729 $ 95.45 181,680 $ 117.26 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
Reconciliation of Basic and Diluted Earnings Per Share | Income Shares Per Share (Numerator) (Denominator) Amount For the Year Ended December 31, 2019 Basic EPS Income available to common stockholders $ 242,202 63,574 $ 3.81 Effect of Dilutive Securities Stock options 2,344 Restricted stock 232 Diluted EPS Income available to common stockholders $ 242,202 66,150 $ 3.66 For the Year Ended December 31, 2018 Basic EPS Income available to common stockholders $ 194,745 62,437 $ 3.12 Effect of Dilutive Securities Stock options 2,440 Restricted stock 81 Diluted EPS Income available to common stockholders $ 194,745 64,958 $ 3.00 For the Year Ended December 31, 2017 Basic EPS Income available to common stockholders $ 220,030 62,435 $ 3.52 Effect of Dilutive Securities Stock options 2,106 Restricted stock 55 Diluted EPS Income available to common stockholders $ 220,030 64,596 $ 3.41 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
Financial information regarding the Company's reportable segments | Year Ended December 31, 2019 2018 2017 Total Sales: Beauty + Home $ 1,376,027 $ 1,446,231 $ 1,333,048 Pharma 1,100,463 955,069 805,913 Food + Beverage 418,017 386,689 352,483 Total Sales $ 2,894,507 $ 2,787,989 $ 2,491,444 Less: Intersegment Sales: Beauty + Home $ 23,313 $ 19,849 $ 19,262 Pharma 9,412 417 33 Food + Beverage 2,050 2,962 2,866 Total Intersegment Sales $ 34,775 $ 23,228 $ 22,161 Net Sales: Beauty + Home $ 1,352,714 $ 1,426,382 $ 1,313,786 Pharma 1,091,051 954,652 805,880 Food + Beverage 415,967 383,727 349,617 Net Sales $ 2,859,732 $ 2,764,761 $ 2,469,283 Adjusted EBITDA (1): Beauty + Home $ 181,150 $ 185,926 $ 173,227 Pharma 387,483 343,706 275,933 Food + Beverage 68,108 57,589 62,903 Corporate & Other, unallocated (44,406) (36,285) (37,457) Acquisition-related costs (2) (3,927) (23,770) — Restructuring Initiatives (3) (20,472) (63,829) (2,208) Gain on insurance recovery (4) — — 10,648 Depreciation and amortization (5) (194,552) (171,747) (153,094) Interest Expense (35,489) (32,626) (40,597) Interest Income 4,174 7,056 5,470 Income before Income Taxes $ 342,069 $ 266,020 $ 294,825 Depreciation and Amortization: Beauty + Home $ 82,778 $ 83,546 $ 79,422 Pharma 65,590 51,495 41,143 Food + Beverage 35,728 27,467 24,720 Corporate & Other 10,456 9,239 7,809 Depreciation and Amortization $ 194,552 $ 171,747 $ 153,094 Capital Expenditures: Beauty + Home $ 96,040 $ 101,371 $ 76,425 Pharma 89,702 54,433 33,005 Food + Beverage 45,130 41,236 38,730 Corporate & Other 13,933 25,739 18,924 Transfer of Corporate Technology Expenditures (6) (2,529) (11,527) (10,460) Capital Expenditures $ 242,276 $ 211,252 $ 156,624 Total Assets: Beauty + Home $ 1,378,292 $ 1,373,816 $ 1,358,283 Pharma 1,422,815 1,324,696 881,443 Food + Beverage 534,527 501,700 296,271 Corporate & Other 226,485 177,523 601,826 Total Assets $ 3,562,119 $ 3,377,735 $ 3,137,823 (1) We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring, acquisition-related costs and insurance recoveries. (2) Acquisition-related costs include transaction costs and purchase accounting adjustments related to inventory for acquisitions (see Note 20 – Acquisitions for further details). (3) Restructuring Initiatives includes expense items for the years ended December 31, 2019 and 2018 as follows (see Note 21 – Restructuring Initiatives for further details): Year Ended December 31, 2019 2018 2017 Restructuring Initiatives by Segment Beauty + Home $ 17,682 $ 52,244 $ 529 Pharma 632 3,589 — Food + Beverage 391 4,185 1,679 Corporate & Other 1,767 3,811 — Total Restructuring Initiatives $ 20,472 $ 63,829 $ 2,208 (4) The gain on insurance recovery relates to the Annecy fire (see Note 19 – Insurance Settlement Receivable for further details). (5) Depreciation and amortization includes amortization related to acquisition purchase accounting adjustments for backlog. See the reconciliation of Non-U.S. GAAP measures starting on page 22 . (6) The transfer of corporate technology expenditures represents amounts of projects managed by corporate for the benefit of specific entities within each segment. Once the projects are complete, all related costs are allocated from corporate to and paid by the appropriate entity and the associated assets are then depreciated at the entity level. |
Restructuring Initiatives | Year Ended December 31, 2019 2018 2017 Restructuring Initiatives by Segment Beauty + Home $ 17,682 $ 52,244 $ 529 Pharma 632 3,589 — Food + Beverage 391 4,185 1,679 Corporate & Other 1,767 3,811 — Total Restructuring Initiatives $ 20,472 $ 63,829 $ 2,208 |
Schedule of net sales and long-lived asset information by geographic area | 2019 2018 2017 Net Sales to Unaffiliated Customers (1): United States $ 836,768 $ 726,336 $ 642,164 Europe: France 895,110 862,364 744,856 Germany 452,409 474,369 416,802 Italy 141,867 144,044 131,523 Other Europe 149,083 146,701 132,992 Total Europe 1,638,469 1,627,478 1,426,173 Other Foreign Countries 384,495 410,947 400,946 Total $ 2,859,732 $ 2,764,761 $ 2,469,283 Property, Plant and Equipment United States $ 300,820 $ 265,004 $ 182,434 Europe: France 338,288 308,250 266,804 Germany 163,782 154,505 163,948 Italy 53,562 54,978 57,080 Other Europe 63,636 59,411 59,963 Total Europe 619,268 577,144 547,795 Other Foreign Countries 167,590 149,465 137,677 Total $ 1,087,678 $ 991,613 $ 867,906 (1) Sales are attributed to countries based upon where the sales invoice to unaffiliated customers is generated. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
Summary of assets acquired and liabilities assumed at estimated fair value | 2019 2018 Assets Cash and equivalents $ 3,427 $ 24,053 Accounts receivable 3,504 20,847 Inventories — 42,169 Prepaid and other 2,478 3,995 Property, plant and equipment 4,267 99,194 Goodwill 59,143 278,020 Intangible assets 52,980 177,120 Other miscellaneous assets 430 1,039 Liabilities Current maturities of long-term obligations — 129 Accounts payable, accrued and other liabilities 5,388 31,989 Long-term obligations — 6,037 Deferred income taxes 2,592 38,442 Retirement and deferred compensation plans — 1,038 Deferred and other non-current liabilities 1,598 15,344 Net assets acquired $ 116,651 $ 553,458 |
Summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date | 2019 2018 Weighted-Average Estimated Weighted-Average Estimated Useful Life Fair Value Useful Life Fair Value (in years) of Asset (in years) of Asset Acquired technology 8 $ 9,160 12 $ 46,700 Customer relationships 11 39,379 16 113,300 Trademarks and trade names 4 2,457 9 14,600 License agreements and other 1 1,984 11 2,520 Total $ 52,980 $ 177,120 |
Schedule of unaudited pro forma financial information | Years Ended December 31, 2018 2017 Net Sales $ 2,857,765 $ 2,605,095 Net Income Attributable to AptarGroup Inc. 208,717 230,753 Net Income per common share — basic 3.34 3.70 Net Income per common share — diluted 3.21 3.57 |
RESTRUCTURING INITIATIVES (Tabl
RESTRUCTURING INITIATIVES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RESTRUCTURING INITIATIVES. | |
Activity associated with the entity's restructuring initiatives | Beginning Net Charges Ending Reserve at for the Year Interest and Reserve at 12/31/2018 Ended 12/31/2019 Cash Paid FX Impact 12/31/2019 Employee severance $ 3,934 $ 8,104 $ (4,813) $ (135) $ 7,090 Professional fees and other costs 11,101 12,368 (19,795) (65) 3,609 Totals $ 15,035 $ 20,472 $ (24,608) $ (200) $ 10,699 |
QUARTERLY DATA (UNAUDITED) (Tab
QUARTERLY DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY DATA (UNAUDITED) | |
Schedule of quarterly results of operations and per share information | Quarter Total First Second Third Fourth for Year Year Ended December 31, 2019: Net sales $ 744,460 $ 742,661 $ 701,278 $ 671,333 $ 2,859,732 Gross profit (1) 233,841 231,739 215,222 193,588 874,390 Net Income 62,999 73,921 56,769 48,538 242,227 Net Income Attributable to AptarGroup, Inc. 63,004 73,915 56,750 48,533 242,202 Per Common Share — 2019: Net Income Attributable to AptarGroup, Inc. Basic $ 1.00 $ 1.16 $ .89 $ .76 $ 3.81 Diluted .96 1.12 .85 .73 3.66 Average number of shares outstanding: Basic 62,964 63,471 64,010 63,835 63,574 Diluted 65,349 66,232 66,702 66,192 66,150 Year Ended December 31, 2018: Net sales $ 703,350 $ 710,608 $ 665,775 $ 685,028 $ 2,764,761 Gross profit (1) 209,171 209,018 192,544 184,775 795,508 Net Income 59,288 55,781 39,022 40,675 194,766 Net Income Attributable to AptarGroup, Inc. 59,300 55,775 38,996 40,674 194,745 Per Common Share — 2018: Net Income Attributable to AptarGroup, Inc. Basic $ .95 $ .89 $ .63 $ .65 $ 3.12 Diluted .92 .86 .60 .62 3.00 Average number of shares outstanding: Basic 62,128 62,402 62,378 62,834 62,437 Diluted 64,414 64,850 65,129 65,344 64,958 (1) Gross profit is defined as net sales less cost of sales and depreciation. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation (Details) - Argentina - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount Recognized in Income Due to Inflationary Accounting | $ 0.8 | |
Maximum | Consolidated net revenues | Geographic concentration risk | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Concentration risk percentage | 2.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of ASU 2016-02 and ASU 2018-02 (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2019 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use assets | $ 72,377 | $ 83,222 | |||
Prepaid and other | $ 118,245 | 115,048 | 116,862 | $ 116,202 | $ 109,791 |
Property, plant and equipment | 991,613 | 1,087,678 | 997,489 | 867,906 | |
Current maturities of long-term obligations, net of unamortized debt issuance costs | 62,678 | 65,988 | 65,309 | ||
Accounts payable, accrued and other liabilities | 525,199 | 573,028 | 545,707 | $ 455,873 | $ 461,579 |
Operating lease liabilities | 55,276 | 61,331 | |||
Long-term obligations, net of unamortized debt issuance costs | 1,125,993 | $ 1,085,453 | 1,129,238 | ||
Reclassification of stranded income tax effects from AOCI to retained earnings | $ 6,700 | ||||
Accounting Standards Update 2016-02 | Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use assets | 83,222 | ||||
Prepaid and other | (1,383) | ||||
Property, plant and equipment | 5,876 | ||||
Current maturities of long-term obligations, net of unamortized debt issuance costs | 2,631 | ||||
Accounts payable, accrued and other liabilities | 20,508 | ||||
Operating lease liabilities | 61,331 | ||||
Long-term obligations, net of unamortized debt issuance costs | $ 3,245 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition, Adjustments to Opening Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||||
Inventories | $ 375,795 | $ 381,110 | $ 330,152 | $ 337,216 | |
Prepaid and other | 115,048 | $ 116,862 | 118,245 | 116,202 | 109,791 |
Liabilities | |||||
Accounts payable, accrued and other liabilities | 573,028 | $ 545,707 | 525,199 | 455,873 | 461,579 |
Deferred income taxes | 41,388 | 53,917 | 22,287 | 20,995 | |
Deferred and other non-current liabilities | 23,250 | 23,465 | 6,432 | 5,608 | |
Stockholders' Equity | |||||
Retained earnings | $ 1,523,820 | 1,371,826 | 1,304,084 | $ 1,301,147 | |
Adjustment/Effect of Change | Accounting Standards Update 2014-09 | |||||
Assets | |||||
Inventories | (10,205) | (7,064) | |||
Prepaid and other | 9,755 | 6,411 | |||
Liabilities | |||||
Accounts payable, accrued and other liabilities | (3,969) | (5,706) | |||
Deferred income taxes | 1,005 | 1,292 | |||
Deferred and other non-current liabilities | 399 | 824 | |||
Stockholders' Equity | |||||
Retained earnings | $ 2,115 | $ 2,937 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition, Balances Reported with and without Adoption of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | |
Consolidated Statements of Income | |||||||||||||
Net sales | $ 671,333 | $ 701,278 | $ 742,661 | $ 744,460 | $ 685,028 | $ 665,775 | $ 710,608 | $ 703,350 | $ 2,859,732 | $ 2,764,761 | $ 2,469,283 | ||
Costs and Expenses | |||||||||||||
Cost of sales | 1,818,398 | 1,812,961 | 1,603,070 | ||||||||||
Provision for income taxes | 99,842 | 71,254 | 74,796 | ||||||||||
Net income | 48,538 | $ 56,769 | $ 73,921 | $ 62,999 | 40,675 | $ 39,022 | $ 55,781 | $ 59,288 | 242,227 | 194,766 | 220,029 | ||
Assets | |||||||||||||
Accounts and note receivable | 558,428 | 569,630 | 558,428 | 569,630 | |||||||||
Inventories | 375,795 | 381,110 | 375,795 | 381,110 | 337,216 | $ 330,152 | |||||||
Prepaid and other | 115,048 | 118,245 | 115,048 | 118,245 | 109,791 | $ 116,862 | 116,202 | ||||||
Liabilities | |||||||||||||
Accounts payable, accrued and other liabilities | 573,028 | 525,199 | 573,028 | 525,199 | 461,579 | $ 545,707 | 455,873 | ||||||
Deferred income taxes | 41,388 | 53,917 | 41,388 | 53,917 | 20,995 | 22,287 | |||||||
Deferred and other non-current liabilities | 23,250 | 23,465 | 23,250 | 23,465 | 5,608 | 6,432 | |||||||
Stockholders' Equity | |||||||||||||
Retained earnings | $ 1,523,820 | 1,371,826 | 1,523,820 | 1,371,826 | 1,301,147 | 1,304,084 | |||||||
Beauty + Home | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 1,352,714 | 1,426,382 | 1,313,786 | ||||||||||
Pharma | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 1,091,051 | 954,652 | 805,880 | ||||||||||
Food + Beverage | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | $ 415,967 | 383,727 | $ 349,617 | ||||||||||
Balances Without Adoption of ASC 606 | Accounting Standards Update 2014-09 | |||||||||||||
Costs and Expenses | |||||||||||||
Cost of sales | 1,811,290 | ||||||||||||
Provision for income taxes | 71,541 | ||||||||||||
Net income | 195,588 | ||||||||||||
Assets | |||||||||||||
Inventories | 391,315 | 391,315 | |||||||||||
Prepaid and other | 108,490 | 108,490 | |||||||||||
Liabilities | |||||||||||||
Accounts payable, accrued and other liabilities | 529,168 | 529,168 | |||||||||||
Deferred income taxes | 52,912 | 52,912 | |||||||||||
Deferred and other non-current liabilities | 23,066 | 23,066 | |||||||||||
Stockholders' Equity | |||||||||||||
Retained earnings | 1,369,711 | 1,369,711 | |||||||||||
Balances Without Adoption of ASC 606 | Accounting Standards Update 2014-09 | Beauty + Home | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 1,424,701 | ||||||||||||
Balances Without Adoption of ASC 606 | Accounting Standards Update 2014-09 | Pharma | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 954,497 | ||||||||||||
Balances Without Adoption of ASC 606 | Accounting Standards Update 2014-09 | Food + Beverage | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 385,001 | ||||||||||||
Adjustment/Effect of Change | Accounting Standards Update 2014-09 | |||||||||||||
Costs and Expenses | |||||||||||||
Cost of sales | 1,671 | ||||||||||||
Provision for income taxes | (287) | ||||||||||||
Net income | (822) | ||||||||||||
Assets | |||||||||||||
Inventories | (10,205) | (10,205) | (7,064) | ||||||||||
Prepaid and other | 9,755 | 9,755 | 6,411 | ||||||||||
Liabilities | |||||||||||||
Accounts payable, accrued and other liabilities | (3,969) | (3,969) | (5,706) | ||||||||||
Deferred income taxes | 1,005 | 1,005 | 1,292 | ||||||||||
Deferred and other non-current liabilities | 399 | 399 | 824 | ||||||||||
Stockholders' Equity | |||||||||||||
Retained earnings | $ 2,115 | 2,115 | $ 2,937 | ||||||||||
Adjustment/Effect of Change | Accounting Standards Update 2014-09 | Beauty + Home | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 1,681 | ||||||||||||
Adjustment/Effect of Change | Accounting Standards Update 2014-09 | Pharma | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | 155 | ||||||||||||
Adjustment/Effect of Change | Accounting Standards Update 2014-09 | Food + Beverage | |||||||||||||
Consolidated Statements of Income | |||||||||||||
Net sales | $ (1,274) |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of ASU 2017-07 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cost of sales | $ 1,818,398 | $ 1,812,961 | $ 1,603,070 |
Selling, research & development and administrative | 454,617 | 429,955 | 387,424 |
Total Operating Expenses | 2,488,039 | 2,478,492 | 2,145,796 |
Operating Income | 371,693 | 286,269 | 323,487 |
Miscellaneous, net | 1,556 | 5,550 | 6,694 |
Total Other (Expense) Income | (29,624) | (20,249) | (28,662) |
Income before Income Taxes | $ 342,069 | 266,020 | $ 294,825 |
Accounting Standards Update 2018-02 | Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | 6,658 | ||
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income/(Loss) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adoption of accounting standards | $ (6,658) |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2019USD ($) | Dec. 31, 2019USD ($)segment$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Aug. 31, 2019USD ($) | May 31, 2018USD ($) | |
Number of reportable segments | segment | 3 | |||||
Total Restructuring Initiatives | $ 20,472 | $ 63,829 | $ 2,208 | |||
INVESTMENTS IN EQUITY SECURITIES | ||||||
Dividends received from affiliates | 0 | 0 | 0 | |||
Proceeds from sale of investment in equity securities | 16,487 | |||||
Investment in unconsolidated affiliate | 3,530 | 10,000 | 5,000 | |||
Increase (decrease) in value of preferred equity stock investment | $ 6,500 | |||||
GOODWILL | ||||||
Impairment of goodwill | $ 0 | |||||
RETIREMENT OF COMMON STOCK | ||||||
Common stock repurchased (retired and held in treasury) (in shares) | shares | 779 | 668 | ||||
Common stock repurchased and retired (in shares) | shares | 623 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
RESEARCH & DEVELOPMENT EXPENSES | ||||||
Research and development expenses incurred net of customer funded research and development or government research and development credits | $ 82,800 | $ 75,300 | 68,200 | |||
INCOME TAXES | ||||||
Net benefit related to additional guidance with respect to the calculation of the transition tax | 0 | 2,570 | (31,575) | |||
Net benefit related to the change in the federal corporate tax rate | 0 | 2,800 | 5,055 | |||
TRANSLATION OF FOREIGN CURRENCIES | ||||||
Foreign Currency Transaction Gain (Loss), before Tax | (1,700) | (1,700) | (5,000) | |||
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ||||||
Provision for Income Taxes | $ 99,842 | 71,254 | 74,796 | |||
Preferred equity stocks | ||||||
INVESTMENTS IN EQUITY SECURITIES | ||||||
Proceeds from sale of investment in equity securities | $ 16,500 | |||||
Investment in preferred equity stock | $ 10,000 | |||||
Increase (decrease) in value of preferred equity stock investment | 6,500 | |||||
Cost method investments | $ 3,500 | |||||
Buildings and improvements | Minimum | ||||||
PROPERTY AND DEPRECIATION | ||||||
Estimated useful lives | 10 years | |||||
Buildings and improvements | Maximum | ||||||
PROPERTY AND DEPRECIATION | ||||||
Estimated useful lives | 40 years | |||||
Machinery and equipment | Minimum | ||||||
PROPERTY AND DEPRECIATION | ||||||
Estimated useful lives | 3 years | |||||
Machinery and equipment | Maximum | ||||||
PROPERTY AND DEPRECIATION | ||||||
Estimated useful lives | 15 years | |||||
Finite-Lived Intangible Assets | Minimum | ||||||
FINITE-LIVED INTANGIBLE ASSETS | ||||||
Finite-Lived Intangible Asset, Useful Life | 1 year | |||||
Finite-Lived Intangible Assets | Maximum | ||||||
FINITE-LIVED INTANGIBLE ASSETS | ||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||
Beauty + Home | ||||||
Total Restructuring Initiatives | $ 17,682 | 52,244 | 529 | |||
Pharma | ||||||
Total Restructuring Initiatives | 632 | 3,589 | ||||
Food + Beverage | ||||||
Total Restructuring Initiatives | 391 | 4,185 | 1,679 | |||
Corporate & Other | ||||||
Total Restructuring Initiatives | 1,767 | 3,811 | ||||
Business Transformation | ||||||
Total Restructuring Initiatives | $ 20,472 | $ 63,829 | $ 2,208 |
REVENUE - Revenue by Geographic
REVENUE - Revenue by Geographic Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE | ||
Net revenue | $ 2,859,732 | $ 2,764,761 |
Beauty + Home | ||
REVENUE | ||
Net revenue | 1,352,714 | 1,426,382 |
Pharma | ||
REVENUE | ||
Net revenue | 1,091,051 | 954,652 |
Food + Beverage | ||
REVENUE | ||
Net revenue | 415,967 | 383,727 |
Europe | ||
REVENUE | ||
Net revenue | 1,638,469 | 1,627,478 |
Europe | Beauty + Home | ||
REVENUE | ||
Net revenue | 792,255 | 816,359 |
Europe | Pharma | ||
REVENUE | ||
Net revenue | 729,882 | 696,079 |
Europe | Food + Beverage | ||
REVENUE | ||
Net revenue | 116,332 | 115,040 |
North America | ||
REVENUE | ||
Net revenue | 836,768 | 726,336 |
North America | Beauty + Home | ||
REVENUE | ||
Net revenue | 310,411 | 334,881 |
North America | Pharma | ||
REVENUE | ||
Net revenue | 297,871 | 196,928 |
North America | Food + Beverage | ||
REVENUE | ||
Net revenue | 228,486 | 194,527 |
Latin America | ||
REVENUE | ||
Net revenue | 220,388 | 235,619 |
Latin America | Beauty + Home | ||
REVENUE | ||
Net revenue | 160,048 | 178,392 |
Latin America | Pharma | ||
REVENUE | ||
Net revenue | 26,344 | 25,485 |
Latin America | Food + Beverage | ||
REVENUE | ||
Net revenue | 33,996 | 31,742 |
Asia | ||
REVENUE | ||
Net revenue | 164,107 | 175,328 |
Asia | Beauty + Home | ||
REVENUE | ||
Net revenue | 90,000 | 96,750 |
Asia | Pharma | ||
REVENUE | ||
Net revenue | 36,954 | 36,160 |
Asia | Food + Beverage | ||
REVENUE | ||
Net revenue | $ 37,153 | $ 42,418 |
REVENUE - Contract Assets and C
REVENUE - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE. | ||
Contract asset (current) | $ 16,245 | $ 15,858 |
Increase / (decrease) in contract asset (current) | 387 | |
Contract liability (current) | 79,305 | 68,134 |
Increase / (decrease) in contract liability (current) | 11,171 | |
Contract liability (long-term) | 9,779 | 11,261 |
Increase / (decrease) in contract liability (long-term) | (1,482) | |
Revenue recognized previously included in current contract liabilities | 61,300 | |
Revenue recognized previously included in current contract liabilities at beginning of the year | 32,600 | |
Unearned revenue associated with outstanding contracts | 515 | $ 758 |
Estimated revenue to be recognized in 2020 | 228 | |
Estimated revenue to be recognized after 2020 | $ 287 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventories, by component | ||||
Raw materials | $ 111,653 | $ 110,720 | ||
Work in process | 123,750 | 131,091 | ||
Finished goods | 140,392 | 139,299 | ||
Total | $ 375,795 | $ 381,110 | $ 330,152 | $ 337,216 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in the carrying amount of goodwill | |||
Goodwill | $ 765,076 | $ 713,710 | $ 445,502 |
Accumulated impairment losses | (1,615) | (1,615) | (1,615) |
Goodwill, Total | 763,461 | 712,095 | 443,887 |
Acquisition | (57,934) | (283,586) | |
Foreign currency exchange effects | (6,568) | (15,378) | |
Impairment of goodwill | 0 | ||
Operating segment | Beauty + Home | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 221,658 | 223,933 | 223,947 |
Goodwill, Total | 221,658 | 223,933 | 223,947 |
Acquisition | (5,565) | ||
Foreign currency exchange effects | (2,275) | (5,579) | |
Operating segment | Pharma | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 413,650 | 359,883 | 203,069 |
Goodwill, Total | 413,650 | 359,883 | 203,069 |
Acquisition | (57,934) | (174,343) | |
Reallocation, net | (8,048) | ||
Foreign currency exchange effects | (4,167) | (9,481) | |
Operating segment | Food + Beverage | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 128,153 | 128,279 | 16,871 |
Goodwill, Total | 128,153 | 128,279 | 16,871 |
Acquisition | (103,678) | ||
Reallocation, net | 8,048 | ||
Foreign currency exchange effects | (126) | (318) | |
Corporate Non-Segment | |||
Changes in the carrying amount of goodwill | |||
Goodwill | 1,615 | 1,615 | 1,615 |
Accumulated impairment losses | $ (1,615) | $ (1,615) | $ (1,615) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortized intangible assets: | |||
Gross Carrying Amount | $ 372,417 | $ 312,508 | |
Accumulated Amortization | (81,333) | (57,604) | |
Net Value | 291,084 | 254,904 | |
Aggregate amortization expense | 27,608 | 15,455 | $ 10,339 |
Future estimated amortization expense | |||
2020 | 31,135 | ||
2021 | 29,582 | ||
2022 | 29,343 | ||
2023 | 29,171 | ||
2024 and thereafter | $ 171,853 | ||
Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 12 years 7 months 6 days | ||
Patents | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 2,804 | 5,427 | |
Accumulated Amortization | (1,318) | (5,294) | |
Net Value | $ 1,486 | 133 | |
Patents | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 7 years 2 months 12 days | ||
Acquired technology | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 100,511 | 92,389 | |
Accumulated Amortization | (25,430) | (18,304) | |
Net Value | $ 75,081 | 74,085 | |
Acquired technology | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 13 years | ||
Customer relationships | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 217,934 | 179,597 | |
Accumulated Amortization | (33,924) | (20,439) | |
Net Value | $ 184,010 | 159,158 | |
Customer relationships | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 13 years 7 months 6 days | ||
Trademarks and trade names | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 35,015 | 21,243 | |
Accumulated Amortization | (11,003) | (5,914) | |
Net Value | $ 24,012 | 15,329 | |
Trademarks and trade names | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 7 years | ||
License agreements and other | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 16,153 | 13,852 | |
Accumulated Amortization | (9,658) | (7,653) | |
Net Value | $ 6,495 | $ 6,199 | |
License agreements and other | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 10 years 3 months 18 days |
ACCOUNTS PAYABLE, ACCRUED AND O
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES. | |||||
Accounts payable, principally trade | $ 192,739 | $ 164,528 | |||
Accrued employee compensation costs | 163,839 | 168,349 | |||
Customer deposits and other unearned income | 86,820 | 67,775 | |||
Other accrued liabilities | 129,630 | 124,547 | |||
Total | $ 573,028 | $ 545,707 | $ 525,199 | $ 455,873 | $ 461,579 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income before income taxes: | |||
United States | $ 94,612 | $ 34,404 | $ 36,139 |
International | 247,457 | 231,616 | 258,686 |
Income before Income Taxes | 342,069 | 266,020 | 294,825 |
Current: | |||
U.S. Federal | 2,129 | 10,273 | (342) |
State/Local | 883 | 877 | 230 |
International | 88,084 | 83,456 | 72,670 |
Total Current | 91,096 | 94,606 | 72,558 |
Deferred: | |||
U.S. Federal/State | 4,670 | (17,019) | 2,570 |
International | 4,076 | (6,333) | (332) |
Total Deferred | 8,746 | (23,352) | 2,238 |
Total | $ 99,842 | $ 71,254 | $ 74,796 |
Statutory federal income tax rate (as a percent) | 21.00% | 21.00% | 35.00% |
Reconciliation of actual income tax provision and tax provision computed by applying statutory federal income tax rate | |||
Income tax at statutory rate | $ 71,835 | $ 55,864 | $ 103,189 |
State income taxes (benefits), net of federal benefit (tax) | 2,622 | (1,516) | (2,620) |
Investment incentives | (2,530) | (1,900) | (1,900) |
Tax resolutions | (1,915) | (3,400) | (5,188) |
Excess tax benefits from equity compensation | (12,520) | (10,800) | (10,383) |
Deferred benefits from tax rate changes | 0 | (2,800) | (5,055) |
U.S. GILTI and BEAT | (1,485) | 5,625 | |
U.S. tax reform - transition tax | 0 | (2,570) | 31,575 |
Results of forward contract | 0 | (23,883) | |
Valuation allowance | 10,623 | 3,170 | 1,344 |
Rate differential on earnings of foreign operations | 29,807 | 26,424 | (16,097) |
Other items, net | 3,405 | 3,157 | 3,814 |
Total | $ 99,842 | $ 71,254 | $ 74,796 |
Effective income tax rate (as a percent) | 29.20% | 26.80% | 25.40% |
Tax benefits from employee share-based compensation | $ 12,500 | ||
Deferred Tax Assets: | |||
Net operating loss carryforwards | 24,941 | $ 22,462 | |
Operating and finance leases | 25,440 | ||
Pension liabilities | 24,925 | 15,405 | |
Stock compensation | 6,082 | 10,130 | |
U.S. federal tax credits | 8,575 | 12,045 | |
U.S. state tax credits | 7,881 | 10,186 | |
Vacation and bonus | 7,645 | 6,891 | |
Research and development | 7,539 | 6,945 | |
Inventory | 5,993 | 6,038 | |
Workers compensation | 3,835 | 3,373 | |
Other | 16,496 | 13,985 | |
Total gross deferred tax assets | 139,352 | 107,460 | |
Less valuation allowance | (23,320) | (11,189) | |
Net deferred tax assets | 116,032 | 96,271 | |
Deferred Tax Liabilities: | |||
Acquisition related intangibles | 62,851 | 59,004 | |
Depreciation and amortization | 28,284 | 31,140 | |
Operating and finance leases | 27,555 | 2,034 | |
Other | 6,215 | 10,351 | |
Total gross deferred tax liabilities | 124,905 | 102,529 | |
Net deferred tax liabilities | (8,873) | $ (6,258) | |
Increase (decrease) in valuation allowance | 12,100 | ||
Tax-effected net operating loss carryforwards not subject to expiration | 20,800 | ||
Tax-effected net operating loss subject to expiration | 4,100 | ||
Amount of state tax credit carryforwards subject to expiration | 7,900 | ||
Foreign Tax Authority | Minimum | |||
Deferred Tax Liabilities: | |||
Estimated additional tax payable on previously unremitted earnings | 20,000 | ||
Foreign Tax Authority | Maximum | |||
Deferred Tax Liabilities: | |||
Estimated additional tax payable on previously unremitted earnings | $ 30,000 | ||
Internal Revenue Service (IRS) | |||
Reconciliation of actual income tax provision and tax provision computed by applying statutory federal income tax rate | |||
Deferred benefits from tax rate changes | $ (6,800) | ||
France | |||
Reconciliation of actual income tax provision and tax provision computed by applying statutory federal income tax rate | |||
Tax resolutions | (2,000) | ||
France and Argentina | |||
Reconciliation of actual income tax provision and tax provision computed by applying statutory federal income tax rate | |||
Deferred benefits from tax rate changes | 1,700 | ||
Europe | |||
Reconciliation of actual income tax provision and tax provision computed by applying statutory federal income tax rate | |||
Tax resolutions | $ (3,200) |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Income Tax Uncertainties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowance [Line Items] | |||
Valuation allowance | $ 23,320 | $ 11,189 | |
Reconciliation of the beginning and ending amount of income tax uncertainties | |||
Balance at the beginning of period | 3,559 | 3,080 | $ 6,356 |
Increases based on tax positions for the current year | 412 | 360 | 370 |
Increases based on tax positions of prior years | 663 | 610 | 1,562 |
Settlements | (558) | (491) | (4,874) |
Lapse of statute of limitations | (429) | (334) | |
Balance at the end of period | 3,647 | 3,559 | 3,080 |
Foreign taxes payable in the event of non-fulfillment of terms of government grants | 1,600 | ||
Amount of income tax uncertainties that, if recognized, would impact the effective tax rate | 3,600 | ||
Decrease in liability for uncertain tax positions, high end of range | 1,800 | ||
Unrecognized tax benefits, amount accrued for the payment of interest and penalties | 1,700 | 1,900 | 1,600 |
Unrecognized tax benefits, amount recognized in income tax expense | (200) | $ 400 | $ 100 |
Deferred tax assets related to tax credit carryforwards, U.S. state | |||
Valuation Allowance [Line Items] | |||
Valuation allowance | 3,100 | ||
Deferred tax assets for specified locations | |||
Valuation Allowance [Line Items] | |||
Valuation allowance | $ 20,200 |
DEBT - Short-term Debt Obligati
DEBT - Short-term Debt Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | $ 44,259 | $ 101,293 |
Revolving credit facility | ||
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | 25,000 | 79,000 |
Notes payable | ||
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | 1,436 | 4,544 |
Overdrafts | ||
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | $ 17,823 | $ 17,749 |
DEBT (Details)
DEBT (Details) $ in Thousands, € in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019EUR (€) | Jan. 01, 2019USD ($) | Dec. 31, 2018EUR (€) | |
Components of the company's debt obligations | |||||||
Consolidated Leverage Ratio | 1.71 | 1.71 | |||||
Consolidated Interest Coverage Ratio | 16.21 | 16.21 | |||||
Long-term obligations gross including current maturities | $ 1,153,682 | $ 1,191,489 | |||||
Current maturities of long-term obligations | (65,988) | (62,678) | |||||
Total long-term obligations | 1,087,694 | 1,128,811 | |||||
Deferred Finance Costs, Net, Total | 2,241 | 2,818 | |||||
Deferred debt issuance costs noncurrent | 2,241 | 2,818 | |||||
Long-term obligations including current maturities | 1,151,441 | 1,188,671 | |||||
Current maturities of long-term obligations | (65,988) | (62,678) | $ (65,309) | ||||
Long-term obligations, net of unamortized debt issuance costs | 1,085,453 | 1,125,993 | $ 1,129,238 | ||||
Aggregate long-term maturities, excluding finance lease obligations | |||||||
Year One | 61,670 | ||||||
Year Two | 61,337 | ||||||
Year Three | 135,324 | ||||||
Year Four | 239,826 | ||||||
Year Five | 375,169 | ||||||
After Year Five | $ 250,404 | ||||||
Minimum | |||||||
Components of the company's debt obligations | |||||||
Consolidated Interest Coverage Ratio | 3 | 3 | |||||
Maximum | |||||||
Components of the company's debt obligations | |||||||
Consolidated Leverage Ratio | 3.50 | 3.50 | |||||
Unsecured lines of credit | |||||||
Components of the company's debt obligations | |||||||
Average borrowings | $ 34,100 | $ 40,000 | |||||
Average annual interest rate on short-term notes payable (as a percent) | 1.60% | 1.90% | |||||
Compensating balance requirement | $ 0 | ||||||
Revolving credit facility | |||||||
Components of the company's debt obligations | |||||||
Credit facility interest and fees | 1,500 | $ 1,500 | |||||
5-year revolving credit facility maturing in July 2022 | |||||||
Components of the company's debt obligations | |||||||
Revolving credit facility maximum borrowing capacity | 300,000 | € 150 | |||||
Amount outstanding under line of credit | 25,000 | 0 | € 0 | € 69 | |||
Notes payable | |||||||
Components of the company's debt obligations | |||||||
Proceeds from debt | $ 280,000 | $ 280,000 | |||||
Long-term obligations gross including current maturities | 168,000 | 224,000 | |||||
Deferred Finance Costs, Net, Total | 390 | 541 | |||||
Long-term obligations including current maturities | $ 167,610 | $ 223,459 | |||||
Interest rate on notes (as a percent) | 1.36% | 1.36% | 1.36% | 1.36% | |||
Floating interest rate prior to conversion to a fixed interest rate | 3.20% | 4.00% | 3.20% | 4.00% | |||
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 19,220 | $ 15,531 | |||||
Long-term obligations including current maturities | $ 19,220 | $ 15,531 | |||||
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | Minimum | |||||||
Components of the company's debt obligations | |||||||
Interest rate on notes (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |||
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | Maximum | |||||||
Components of the company's debt obligations | |||||||
Interest rate on notes (as a percent) | 10.90% | 16.00% | 10.90% | 16.00% | |||
Senior unsecured notes 3.2%, due in 2022 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 75,000 | $ 75,000 | |||||
Deferred Finance Costs, Net, Total | 64 | 88 | |||||
Long-term obligations including current maturities | $ 74,936 | $ 74,912 | |||||
Interest rate on notes (as a percent) | 3.20% | 3.20% | 3.20% | 3.20% | |||
Senior unsecured notes 3.5%, due in 2023 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||||
Deferred Finance Costs, Net, Total | 144 | 181 | |||||
Long-term obligations including current maturities | $ 124,856 | $ 124,819 | |||||
Interest rate on notes (as a percent) | 3.50% | 3.50% | 3.50% | 3.50% | |||
Senior unsecured notes 0.98%, due in 2023 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 112,170 | $ 114,535 | |||||
Deferred Finance Costs, Net, Total | 356 | 432 | |||||
Long-term obligations including current maturities | $ 111,814 | $ 114,103 | |||||
Interest rate on notes (as a percent) | 1.00% | 1.00% | 1.00% | 1.00% | |||
Senior unsecured notes 3.4%, due in 2024 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 50,000 | $ 50,000 | |||||
Deferred Finance Costs, Net, Total | 63 | 76 | |||||
Long-term obligations including current maturities | $ 49,937 | $ 49,924 | |||||
Interest rate on notes (as a percent) | 3.40% | 3.40% | 3.40% | 3.40% | |||
Senior unsecured notes 3.5%, due in 2024 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 100,000 | $ 100,000 | |||||
Deferred Finance Costs, Net, Total | 144 | 181 | |||||
Long-term obligations including current maturities | $ 99,856 | $ 99,819 | |||||
Interest rate on notes (as a percent) | 3.50% | 3.50% | 3.50% | 3.50% | |||
Senior unsecured notes 1.17%, due in 2024 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 224,340 | $ 229,070 | |||||
Deferred Finance Costs, Net, Total | 742 | 904 | |||||
Long-term obligations including current maturities | $ 223,598 | $ 228,166 | |||||
Interest rate on notes (as a percent) | 1.20% | 1.20% | 1.20% | 1.20% | |||
Senior unsecured notes 3.6%, due in 2025 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||||
Deferred Finance Costs, Net, Total | 169 | 207 | |||||
Long-term obligations including current maturities | $ 124,831 | $ 124,793 | |||||
Interest rate on notes (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | |||
Senior unsecured notes 3.6%, due in 2026 | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||||
Deferred Finance Costs, Net, Total | 169 | 208 | |||||
Long-term obligations including current maturities | $ 124,831 | $ 124,792 | |||||
Interest rate on notes (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | |||
Capital lease obligations | |||||||
Components of the company's debt obligations | |||||||
Long-term obligations gross including current maturities | $ 29,952 | $ 8,353 | |||||
Long-term obligations including current maturities | $ 29,952 | $ 8,353 |
LEASE COMMITMENTS - Components
LEASE COMMITMENTS - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
LEASE COMMITMENTS | ||
Rent expense under operating leases | $ 32,700 | |
Components of lease expense: | ||
Operating lease cost | $ 23,410 | |
Finance lease cost: | ||
Amortization of right-of-use assets | 4,217 | |
Interest on lease liabilities | 1,353 | |
Total finance lease cost | 5,570 | |
Short-term lease and variable lease costs | $ 8,629 |
LEASE COMMITMENTS - Supplementa
LEASE COMMITMENTS - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 21,872 |
Operating cash flows from finance leases | 1,245 |
Financing cash flows from finance leases | 4,730 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 15,226 |
Finance leases | $ 15,957 |
LEASE COMMITMENTS - Supplemen_2
LEASE COMMITMENTS - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 72,377 | $ 83,222 |
Operating lease liability, current | $ 16,578 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts Payable, Accrued Liabilities, and Derivative Liabilities, Current | |
Operating lease liabilities | $ 55,276 | $ 61,331 |
Total operating lease liabilities | 71,854 | |
Finance Leases | ||
Finance leases included in property, plant and equipment, gross | 47,020 | |
Accumulated depreciation of finance leases included in property, plant and equipment, net | (4,271) | |
Total finance leases | $ 42,749 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | |
Current portion of finance lease liabilities | $ 4,318 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | |
Noncurrent portion of finance lease liabilities | $ 25,634 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | |
Total finance lease liabilities | $ 29,952 | |
Weighted Average Remaining Lease Term (in years) | ||
Operating leases | 6 years 1 month 6 days | |
Finance leases | 7 years | |
Weighted Average Discount Rate | ||
Operating leases | 5.05% | |
Finance leases | 5.13% |
LEASE COMMITMENTS - Maturities
LEASE COMMITMENTS - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Maturities of operating lease liabilities: | ||
Year 1 | $ 19,652 | |
Year 2 | 15,411 | |
Year 3 | 10,740 | |
Year 4 | 9,365 | |
Year 5 | 6,998 | |
Thereafter | 22,331 | |
Total lease payments | 84,497 | |
Less imputed interest | (12,643) | |
Total operating lease liabilities | 71,854 | |
Maturities of finance lease liabilities: | ||
Year 1 | 5,655 | |
Year 2 | 4,787 | |
Year 3 | 3,870 | |
Year 4 | 3,099 | |
Year 5 | 2,658 | |
Thereafter | 18,051 | |
Total lease payments | 38,120 | $ 10,894 |
Less imputed interest | (8,168) | |
Total finance lease liabilities | 29,952 | |
Future minimum payments under noncancelable operating leases, by year and in the aggregate | ||
Year 1 | 26,512 | |
Year 2 | 21,386 | |
Year 3 | 16,529 | |
Year 4 | 12,549 | |
Year 5 | 10,225 | |
Thereafter | 21,932 | |
Total lease payments | 109,133 | |
Future minimum payments under capital leases, by year and in the aggregate | ||
Year 1 | 1,828 | |
Year 2 | 1,653 | |
Year 3 | 1,546 | |
Year 4 | 1,160 | |
Year 5 | 880 | |
Thereafter | 3,827 | |
Less imputed interest | (2,541) | |
Present value of future minimum lease payments | $ 8,353 | |
Amount of additional operating and finance leases that have not yet commenced | $ 1,800 | |
Minimum | ||
Future minimum payments under capital leases, by year and in the aggregate | ||
Term of operating and finance leases that have not yet commenced | 3 years | |
Maximum | ||
Future minimum payments under capital leases, by year and in the aggregate | ||
Term of operating and finance leases that have not yet commenced | 10 years |
RETIREMENT AND DEFERRED COMPE_3
RETIREMENT AND DEFERRED COMPENSATION PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
United States | ||||||
Change in benefit obligation: | ||||||
Benefit obligation at beginning of year | $ 180,803 | $ 198,450 | ||||
Service cost | 11,093 | 11,396 | $ 9,706 | |||
Interest cost | 7,381 | 6,878 | 7,010 | |||
Actuarial (gain) loss | 39,209 | (23,510) | ||||
Benefits paid | (11,211) | (12,411) | ||||
Benefit obligation at end of year | 227,275 | 180,803 | 198,450 | |||
Change in plan assets: | ||||||
Fair value of plan assets at beginning of year | 169,958 | 169,600 | ||||
Actual return on plan assets | 29,618 | (7,642) | ||||
Employer contribution | 436 | 20,411 | ||||
Benefits paid | (11,211) | (12,411) | ||||
Fair value of plan assets at end of year | 188,801 | 169,958 | 169,600 | |||
Funded status at end of year | $ (38,474) | $ (10,845) | ||||
Funded status amounts recognized in Consolidated Balance Sheet | ||||||
Non-current assets | 207 | |||||
Current liabilities | (449) | (430) | ||||
Non-current liabilities | (38,025) | (10,622) | ||||
Funded status amount | (38,474) | (10,845) | ||||
Amounts recognized in accumulated other comprehensive loss | ||||||
Net actuarial loss | 68,789 | 48,776 | ||||
Tax effects | (15,821) | (17,876) | ||||
Net amount recognized | 52,968 | 30,900 | ||||
Changes in benefit obligations and plan assets recognized in other comprehensive income | ||||||
Current year actuarial gain (loss) | (21,970) | 4,611 | (12,593) | |||
Amortization of net loss | 1,957 | 4,873 | 3,205 | |||
Net amount recognized | (20,013) | 9,484 | (9,388) | |||
Amounts in accumulated other comprehensive loss expected to be recognized as components of periodic benefit cost in next fiscal year | ||||||
Amortization of net loss | 5,719 | |||||
Amount expected to be recognized in next fiscal year | 5,719 | |||||
Components of net periodic benefit cost: | ||||||
Service cost | 11,093 | 11,396 | 9,706 | |||
Interest cost | 7,381 | 6,878 | 7,010 | |||
Expected return on plan assets | (12,379) | (11,257) | (9,880) | |||
Amortization of net loss | 1,957 | 4,873 | 3,205 | |||
Net periodic benefit cost | $ 8,052 | $ 11,890 | $ 10,041 | |||
Accumulated benefit obligation | 205,300 | 163,000 | ||||
Projected benefit obligation ("PBO"), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets | ||||||
Projected benefit obligation | 227,275 | 11,052 | ||||
Accumulated benefit obligation | 205,326 | 9,216 | ||||
Fair value of plan assets | 188,801 | |||||
PBO, ABO, and fair value of plan assets for all pension plans with a PBO in excess of plan assets | ||||||
Projected benefit obligation | 227,275 | 11,052 | ||||
Accumulated benefit obligation | 205,326 | $ 9,216 | ||||
Fair value of plan assets | $ 188,801 | |||||
Weighted-average assumptions used to determine benefit obligations | ||||||
Discount rate (as a percent) | 3.20% | 4.20% | 3.55% | |||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | 4.00% | |||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Discount rate (as a percent) | 4.20% | 3.55% | 4.05% | |||
Expected long-term return on plan assets (as a percent) | 7.00% | 7.00% | 7.00% | |||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | 4.00% | |||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 100.00% | 100.00% | ||||
Total Investments in Fair Value Hierarchy | $ 119,883 | $ 107,943 | ||||
Total Investments | $ 188,801 | $ 169,600 | $ 169,600 | 188,801 | 169,958 | $ 169,600 |
Minimum funding requirement | 0 | |||||
Expected contribution in next fiscal year | 400 | |||||
United States | Cash and Short Term Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | $ 1,988 | $ 8,964 | ||||
United States | Equity Securities | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 49.00% | 44.00% | ||||
Target allocation (as a percent) | 60.00% | |||||
Total Investments in Fair Value Hierarchy | $ 81,997 | $ 66,707 | ||||
United States | Fixed Income Funds | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 29.00% | 29.00% | ||||
Total Investments in Fair Value Hierarchy | $ 35,898 | $ 32,272 | ||||
United States | Hedge Fund | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 10.00% | 10.00% | ||||
United States | Infrastructure | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 6.00% | 7.00% | ||||
United States | Money market | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 1.00% | 5.00% | ||||
United States | Fixed income securities and infrastructure | ||||||
Plan Assets: | ||||||
Target allocation (as a percent) | 40.00% | |||||
United States | Real Estate Funds | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 5.00% | 5.00% | ||||
United States | Level 1 | ||||||
Change in plan assets: | ||||||
Fair value of plan assets at beginning of year | 107,943 | |||||
Fair value of plan assets at end of year | 119,883 | 107,943 | ||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | $ 119,883 | $ 107,943 | ||||
Total Investments | 107,943 | 107,943 | 119,883 | 107,943 | ||
United States | Level 1 | Cash and Short Term Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 1,988 | 8,964 | ||||
United States | Level 1 | Cash and Short Term Securities | USD | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 1,988 | 8,964 | ||||
United States | Level 1 | Equity Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 81,997 | 66,707 | ||||
United States | Level 1 | US Large Cap Equities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 48,580 | 38,804 | ||||
United States | Level 1 | US Small Cap Equities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 9,921 | 7,747 | ||||
United States | Level 1 | International Equities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 23,496 | 20,156 | ||||
United States | Level 1 | Fixed Income Funds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 35,898 | 32,272 | ||||
United States | Net Asset Value per Share | ||||||
Plan Assets: | ||||||
Investments at Net Asset Value per Share | 68,918 | 62,015 | ||||
Foreign Plans | ||||||
Change in benefit obligation: | ||||||
Benefit obligation at beginning of year | 104,911 | 109,030 | ||||
Service cost | 5,921 | 5,954 | 5,526 | |||
Interest cost | 2,023 | 1,828 | 1,747 | |||
Special termination benefit charge | 64 | 62 | ||||
Plan amendment | 18 | |||||
Curtailment/Settlement | (271) | (1,751) | ||||
Transfer | 939 | |||||
Business acquired | 1,937 | |||||
Prior service cost | (451) | 35 | ||||
Actuarial (gain) loss | 13,575 | (3,743) | ||||
Benefits paid | (4,130) | (3,288) | ||||
Foreign currency translation adjustment | (2,109) | (5,153) | ||||
Benefit obligation at end of year | 120,490 | 104,911 | 109,030 | |||
Change in plan assets: | ||||||
Fair value of plan assets at beginning of year | 68,992 | 73,384 | ||||
Actual return on plan assets | 3,851 | (487) | ||||
Employer contribution | 6,542 | 2,780 | ||||
Benefits paid | (4,130) | (3,288) | ||||
Transfer | 359 | |||||
Foreign currency translation adjustment | (1,425) | (3,397) | ||||
Fair value of plan assets at end of year | 74,189 | 68,992 | 73,384 | |||
Funded status at end of year | (46,301) | (35,919) | ||||
Funded status amounts recognized in Consolidated Balance Sheet | ||||||
Non-current assets | 938 | 500 | ||||
Current liabilities | (44) | (8) | ||||
Non-current liabilities | (47,195) | (36,411) | ||||
Funded status amount | (46,301) | (35,919) | ||||
Amounts recognized in accumulated other comprehensive loss | ||||||
Net actuarial loss | 40,442 | 29,761 | ||||
Net prior service cost | 3,774 | 4,656 | ||||
Tax effects | (14,040) | (4,855) | ||||
Net amount recognized | 30,176 | 29,562 | ||||
Changes in benefit obligations and plan assets recognized in other comprehensive income | ||||||
Current year actuarial gain (loss) | (11,999) | 534 | 2,952 | |||
Current year prior service cost | 451 | (35) | (1,399) | |||
Transfer Prior service cost | (18) | |||||
Transfer Actuarial (loss) gain | (126) | |||||
Recognition due to curtailment | 1,692 | |||||
Amortization of net loss | 1,444 | 1,716 | 1,895 | |||
Amortization of prior service cost | 449 | 720 | 400 | |||
Net amount recognized | (9,799) | 4,627 | 3,848 | |||
Amounts in accumulated other comprehensive loss expected to be recognized as components of periodic benefit cost in next fiscal year | ||||||
Amortization of net loss | 2,092 | |||||
Amortization of prior service cost | 391 | |||||
Amount expected to be recognized in next fiscal year | 2,483 | |||||
Components of net periodic benefit cost: | ||||||
Service cost | 5,921 | 5,954 | 5,526 | |||
Interest cost | 2,023 | 1,828 | 1,747 | |||
Expected return on plan assets | (2,366) | (2,610) | (2,409) | |||
Amortization of net loss | 1,444 | 1,716 | 1,895 | |||
Amortization of prior service cost | 449 | 720 | 400 | |||
Net periodic benefit cost | 7,471 | 7,608 | 7,159 | |||
Curtailment | (246) | (59) | ||||
Special termination benefit charge | 65 | 62 | ||||
Total net periodic benefit cost | $ 7,290 | $ 7,611 | $ 7,159 | |||
Accumulated benefit obligation | 91,800 | 80,900 | ||||
Projected benefit obligation ("PBO"), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets | ||||||
Projected benefit obligation | 92,561 | 93,029 | ||||
Accumulated benefit obligation | 65,062 | 68,981 | ||||
Fair value of plan assets | 46,371 | 56,611 | ||||
PBO, ABO, and fair value of plan assets for all pension plans with a PBO in excess of plan assets | ||||||
Projected benefit obligation | 102,310 | 92,555 | ||||
Accumulated benefit obligation | 73,943 | 68,506 | ||||
Fair value of plan assets | $ 55,260 | $ 56,136 | ||||
Weighted-average assumptions used to determine benefit obligations | ||||||
Discount rate (as a percent) | 1.04% | 1.82% | 1.62% | |||
Rate of compensation increase (as a percent) | 3.05% | 3.01% | 3.02% | |||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Discount rate (as a percent) | 1.84% | 1.62% | 1.65% | |||
Expected long-term return on plan assets (as a percent) | 3.69% | 3.66% | 3.66% | |||
Rate of compensation increase (as a percent) | 3.05% | 3.02% | 3.00% | |||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 100.00% | 100.00% | ||||
Total Investments in Fair Value Hierarchy | $ 74,189 | $ 68,992 | ||||
Total Investments | $ 68,992 | $ 68,992 | $ 73,384 | 74,189 | 68,992 | $ 73,384 |
Expected contribution in next fiscal year | 700 | |||||
Foreign Plans | Cash and Short Term Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | $ 2,030 | $ 718 | ||||
Foreign Plans | Equity Securities | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 4.00% | 4.00% | ||||
Total Investments in Fair Value Hierarchy | $ 2,995 | $ 2,591 | ||||
Foreign Plans | Fixed Income Funds | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 1.00% | 1.00% | ||||
Total Investments in Fair Value Hierarchy | $ 820 | $ 717 | ||||
Foreign Plans | Corporate debts securities | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 3.00% | 3.00% | ||||
Total Investments in Fair Value Hierarchy | $ 2,115 | $ 2,097 | ||||
Foreign Plans | Investment Funds | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 89.00% | 91.00% | ||||
Target allocation (as a percent) | 100.00% | |||||
Total Investments in Fair Value Hierarchy | $ 66,229 | $ 62,869 | ||||
Foreign Plans | Money market | ||||||
Plan Assets: | ||||||
Weighted-average asset allocations (as a percent) | 3.00% | 1.00% | ||||
Foreign Plans | Level 1 | ||||||
Change in plan assets: | ||||||
Fair value of plan assets at beginning of year | 28,245 | |||||
Fair value of plan assets at end of year | 31,757 | 28,245 | ||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | $ 31,757 | $ 28,245 | ||||
Total Investments | 28,245 | 28,245 | 31,757 | 28,245 | ||
Foreign Plans | Level 1 | Cash and Short Term Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,030 | 718 | ||||
Foreign Plans | Level 1 | Cash and Short Term Securities | EUR | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,012 | 718 | ||||
Foreign Plans | Level 1 | Cash and Short Term Securities | Others | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 18 | |||||
Foreign Plans | Level 1 | Equity Securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,995 | 2,591 | ||||
Foreign Plans | Level 1 | International Equities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,995 | 2,591 | ||||
Foreign Plans | Level 1 | Fixed Income Funds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 820 | 717 | ||||
Foreign Plans | Level 1 | Corporate debts securities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,115 | 2,097 | ||||
Foreign Plans | Level 1 | Euro Corporate Bonds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 2,115 | 2,097 | ||||
Foreign Plans | Level 1 | Investment Funds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 23,797 | 22,122 | ||||
Foreign Plans | Level 1 | Mutual Funds in Equities | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 4,025 | 3,339 | ||||
Foreign Plans | Level 1 | Mutual Funds in Bonds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 18,881 | 18,060 | ||||
Foreign Plans | Level 1 | Mutual Funds Diversified | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 891 | 723 | ||||
Foreign Plans | Level 2 | ||||||
Change in plan assets: | ||||||
Fair value of plan assets at beginning of year | 40,747 | |||||
Fair value of plan assets at end of year | 42,432 | 40,747 | ||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 42,432 | 40,747 | ||||
Total Investments | $ 40,747 | $ 40,747 | 42,432 | 40,747 | ||
Foreign Plans | Level 2 | Investment Funds | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 42,432 | 40,747 | ||||
Foreign Plans | Level 2 | Mutual Funds Diversified | ||||||
Plan Assets: | ||||||
Total Investments in Fair Value Hierarchy | 42,432 | 40,747 | ||||
Non-qualified supplemental pension plan | United States | ||||||
Non-qualified supplemental pension plan information | ||||||
Non funded liability | $ 12,600 | $ 11,100 |
RETIREMENT AND DEFERRED COMPE_4
RETIREMENT AND DEFERRED COMPENSATION PLANS (Schedule of Estimated Benefit Payments to Defined Benefit Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
United States | |||
Defined contribution plan | |||
Total contributions by Company | $ 4,100 | $ 3,700 | $ 3,300 |
Estimated benefit payments relating to defined benefit plans over the next ten years | |||
2020 | 11,064 | ||
2021 | 11,134 | ||
2022 | 11,665 | ||
2023 | 12,467 | ||
2024 | 13,077 | ||
2025 - 2029 | $ 74,584 | ||
United States | Maximum | |||
Defined contribution plan | |||
Employer matching contribution as a percentage of salary | 3.00% | ||
Foreign Plans | |||
Defined contribution plan | |||
Total contributions by Company | $ 2,300 | $ 2,400 | $ 2,200 |
Estimated benefit payments relating to defined benefit plans over the next ten years | |||
2020 | 5,382 | ||
2021 | 2,904 | ||
2022 | 3,155 | ||
2023 | 4,676 | ||
2024 | 6,537 | ||
2025 - 2029 | $ 34,386 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated other comprehensive income activity | |||
Balance at the beginning of the period | $ 1,422,556 | ||
Balance at the end of the period | 1,571,916 | $ 1,422,556 | |
Foreign Currency | |||
Accumulated other comprehensive income activity | |||
Balance at the beginning of the period | (248,401) | (185,503) | $ (259,888) |
Other comprehensive income (loss) before reclassifications | (8,723) | (62,898) | 74,385 |
Net current-period other comprehensive income (loss) | (8,723) | (62,898) | 74,385 |
Balance at the end of the period | (257,124) | (248,401) | (185,503) |
Defined Benefit Pension Plans | |||
Accumulated other comprehensive income activity | |||
Balance at the beginning of the period | (60,463) | (64,595) | (59,775) |
Other comprehensive income (loss) before reclassifications | (25,557) | 5,266 | (8,944) |
Amounts reclassified from accumulated other comprehensive income | 2,873 | 5,524 | 4,124 |
Net current-period other comprehensive income (loss) | (22,684) | 10,790 | (4,820) |
Balance at the end of the period | (83,147) | (60,463) | (64,595) |
Defined Benefit Pension Plans | Accounting Standards Update 2018-02 | |||
Accumulated other comprehensive income activity | |||
Adoption of accounting standards | (6,658) | ||
Derivatives | |||
Accumulated other comprehensive income activity | |||
Balance at the beginning of the period | (1,640) | (3,204) | (46) |
Other comprehensive income (loss) before reclassifications | 8,026 | 16,624 | (11,806) |
Amounts reclassified from accumulated other comprehensive income | (8,063) | (15,060) | 8,648 |
Net current-period other comprehensive income (loss) | (37) | 1,564 | (3,158) |
Balance at the end of the period | (1,677) | (1,640) | (3,204) |
Accumulated Other Comprehensive Income/(Loss) | |||
Accumulated other comprehensive income activity | |||
Balance at the beginning of the period | (310,504) | (253,302) | (319,709) |
Other comprehensive income (loss) before reclassifications | (26,254) | (41,008) | 53,635 |
Amounts reclassified from accumulated other comprehensive income | (5,190) | (9,536) | 12,772 |
Net current-period other comprehensive income (loss) | (31,444) | (50,544) | 66,407 |
Balance at the end of the period | $ (341,948) | (310,504) | $ (253,302) |
Accumulated Other Comprehensive Income/(Loss) | Accounting Standards Update 2018-02 | |||
Accumulated other comprehensive income activity | |||
Adoption of accounting standards | $ (6,658) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (Reclassifications From Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Miscellaneous, net | $ 1,556 | $ 5,550 | $ 6,694 | ||||||||
Interest expense | 35,489 | 32,626 | 40,597 | ||||||||
Total before tax | (342,069) | (266,020) | (294,825) | ||||||||
Tax benefit | 99,842 | 71,254 | 74,796 | ||||||||
Total reclassifications for the period | $ (48,533) | $ (56,750) | $ (73,915) | $ (63,004) | $ (40,674) | $ (38,996) | $ (55,775) | $ (59,300) | (242,202) | (194,745) | (220,030) |
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Total reclassifications for the period | (5,190) | (9,536) | 12,772 | ||||||||
Defined Benefit Pension Plans | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amortization of net loss | 3,401 | 6,589 | 5,100 | ||||||||
Amortization of prior service cost | 449 | 720 | 400 | ||||||||
Total before tax | 3,850 | 7,309 | 5,500 | ||||||||
Tax benefit | (977) | (1,785) | (1,376) | ||||||||
Total reclassifications for the period | 2,873 | 5,524 | 4,124 | ||||||||
Derivatives | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Total before tax | (8,063) | (18,149) | 10,427 | ||||||||
Tax benefit | 3,089 | (1,779) | |||||||||
Total reclassifications for the period | (8,063) | (15,060) | 8,648 | ||||||||
Derivatives | Treasury locks | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Interest expense | 26 | 42 | |||||||||
Derivatives | Cross Currency Swap Contract: Interest Component | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Interest expense | (4,805) | (5,150) | (1,526) | ||||||||
Derivatives | Cross Currency Swap Contract: Foreign Exchange Component | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Miscellaneous, net | $ (3,258) | $ (13,025) | $ 11,911 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Cash Flow Hedge) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 20, 2017 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Net after-tax loss included in accumulated other comprehensive earnings | $ 37 | $ (1,547) | $ 3,186 | ||
Derivatives in Cash Flow Hedging Relationships | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 8,361 | 20,039 | |||
Cross Currency Swap Contract | Derivatives in Cash Flow Hedging Relationships | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Amount hedged | $ 280,000 | ||||
Net after-tax loss included in accumulated other comprehensive earnings | 1,700 | $ 1,600 | |||
Fair value of derivative asset | 2,600 | ||||
Cross Currency Swap Contract: Interest Component | Derivatives in Cash Flow Hedging Relationships | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Amount expected to be recognized in earnings in next twelve months related to cross currency swap contract | $ 2,800 | ||||
Notes payable | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Proceeds from debt | $ 280,000 | $ 280,000 | |||
Interest rate on notes (as a percent) | 1.36% | 1.36% |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Fair Value of Derivative Instruments in the Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value of Derivative Instruments | |||
Derivative Assets | $ 2,758 | $ 259 | |
Derivative Liabilities | 401 | 1,371 | |
Cash delivered on foreign currency forward contract | $ 66,155 | ||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | (141) | 652 | |
Foreign Exchange Contracts | |||
Fair Value of Derivative Instruments | |||
Aggregate amount of forward exchange contracts | 51,500 | ||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | (141) | 652 | |
Derivative Contracts Not Designated as Hedging Instruments | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 206 | 259 | |
Derivative Liabilities | 401 | 331 | |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Prepaid and other | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 206 | 259 | |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts payable and accrued liabilities | |||
Fair Value of Derivative Instruments | |||
Derivative Liabilities | 401 | 331 | |
Derivative Contracts Designated as Hedging Instruments | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 2,552 | ||
Derivative Liabilities | 1,040 | ||
Derivative Contracts Designated as Hedging Instruments | Cross Currency Swap Contract | Prepaid and other | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | $ 2,552 | ||
Derivative Contracts Designated as Hedging Instruments | Cross Currency Swap Contract | Accounts payable and accrued liabilities | |||
Fair Value of Derivative Instruments | |||
Derivative Liabilities | $ 1,040 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Effect of Derivative Instruments on the Consolidated Statements of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative instruments, gain or (loss) | |||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | $ (141) | $ 652 | |
Other Nonoperating Income (Expense) | 1,556 | 5,550 | $ 6,694 |
Interest Expense. | 35,489 | 32,626 | $ 40,597 |
Derivatives in Cash Flow Hedging Relationships | |||
Derivative instruments, gain or (loss) | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 8,361 | 20,039 | |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 8,063 | 18,175 | |
Foreign Exchange Contracts | |||
Derivative instruments, gain or (loss) | |||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | (141) | 652 | |
Cross Currency Swap Contract: Interest Component | Interest expense | Derivatives in Cash Flow Hedging Relationships | |||
Derivative instruments, gain or (loss) | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 5,103 | 7,014 | |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 4,805 | 5,150 | |
Interest Expense. | 35,489 | ||
Cross Currency Swap Contract: Foreign Exchange Component | Other Income (Expense): Miscellaneous, net | Derivatives in Cash Flow Hedging Relationships | |||
Derivative instruments, gain or (loss) | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 3,258 | 13,025 | |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 3,258 | $ 13,025 | |
Other Nonoperating Income (Expense) | $ 1,556 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Derivative Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Assets | ||
Gross Amount | $ 2,758 | $ 259 |
Net Amounts Presented in the Statement of Financial Position | 2,758 | 259 |
Net Amount | 2,758 | 259 |
Derivative Liabilities | ||
Gross Amount | 401 | 1,371 |
Net Amounts Presented in the Statement of Financial Position | 401 | 1,371 |
Net Amount | $ 401 | $ 1,371 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 31, 2019 | May 31, 2019 | Dec. 31, 2018 |
Liabilities | ||||
Fair value of long-term obligations | $ 1,100,000 | $ 1,100,000 | ||
Reboul | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 0 | |||
Gateway Analytical | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 3,000 | $ 3,000 | ||
Noble | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 2,900 | $ 2,900 | ||
Assets and liabilities measured at fair value on recurring basis | Total | ||||
Assets | ||||
Foreign exchange contracts, assets | 206 | 259 | ||
Cross currency swap contract, asset | 2,552 | |||
Total assets at fair value | 2,758 | 259 | ||
Liabilities | ||||
Foreign exchange contracts, liabilities | 401 | 331 | ||
Cross currency swap contract, liability | 1,040 | |||
Fair value of contingent consideration arrangement | 5,930 | |||
Total liabilities at fair value | 6,331 | 1,371 | ||
Assets and liabilities measured at fair value on recurring basis | Level 2 | ||||
Assets | ||||
Foreign exchange contracts, assets | 206 | 259 | ||
Cross currency swap contract, asset | 2,552 | |||
Total assets at fair value | 2,758 | 259 | ||
Liabilities | ||||
Foreign exchange contracts, liabilities | 401 | 331 | ||
Cross currency swap contract, liability | 1,040 | |||
Fair value of contingent consideration arrangement | 0 | |||
Total liabilities at fair value | 401 | $ 1,371 | ||
Assets and liabilities measured at fair value on recurring basis | Level 3 | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 5,930 | |||
Total liabilities at fair value | $ 5,930 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and contingencies | ||||
Environmental Remediation Expense | $ 1,500,000 | |||
Brazil | ||||
Commitments and contingencies | ||||
Accrual for Environmental Loss Contingencies | $ 1,500,000 | $ 500,000 | ||
Payments to settle environmental loss contingency | 600,000 | |||
Brazil | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Recovery of part of claim | $ 2,700,000 | $ 631,000 | ||
Brazil | Reduction of gross receipts tax | Cost of Sales | ||||
Commitments and contingencies | ||||
Recovery of part of claim | 1,700,000 | |||
Brazil | Reduction of gross receipts tax | Interest Income | ||||
Commitments and contingencies | ||||
Recovery of part of claim | $ 1,000,000 | |||
Brazil | Minimum | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Estimated potential recoveries | 3,000,000 | |||
Brazil | Maximum | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Estimated potential recoveries | 10,000,000 | |||
Indemnification agreements | ||||
Commitments and contingencies | ||||
Liabilities recorded under indemnification agreements | 0 | |||
Tax Assessment | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | 7,900,000 | |||
Loss contingency liability recorded | 0 | |||
Tax Assessment, Interest | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | 3,000,000 | |||
Tax Assessment, Penalites | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | $ 1,000,000 |
STOCK REPURCHASE PROGRAM (Detai
STOCK REPURCHASE PROGRAM (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 18, 2019 | Oct. 20, 2016 | |
Stock repurchase program | |||||
Aggregate amount of share repurchases (in dollars) | $ 86,497 | $ 3,905 | $ 120,540 | ||
Common stock repurchased (retired and held in treasury) (in shares) | 779 | 668 | |||
Common stock repurchased (retired and held in treasury) | $ 86,500 | $ 61,700 | |||
Common stock repurchased and retired (in shares) | 623 | ||||
Common stock repurchased and retired | $ 57,786 | $ 40,994 | |||
Remaining authorized repurchase amount | $ 278,500 | ||||
Stock Repurchase Program October 20, 2016 | |||||
Stock repurchase program | |||||
Share repurchases authorized amount | $ 350,000 | ||||
Stock Repurchase Program April 18, 2019 | |||||
Stock repurchase program | |||||
Share repurchases authorized amount | $ 350,000 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock and treasury stock and the share activity | |||
Authorized common stock (in shares) | 199,000,000 | 199,000,000 | |
Balance at the beginning of the year (in shares) | 67,300,000 | ||
Common stock repurchased and retired | (623,000) | ||
Balance at the end of the year (in shares) | 68,600,000 | 67,300,000 | |
Cash dividends paid on the common stock | $ 90,208 | $ 82,346 | $ 79,944 |
Common Stock Par Value | |||
Common stock and treasury stock and the share activity | |||
Balance at the beginning of the year (in shares) | 67,341,316 | 66,742,490 | |
Restricted stock vestings (in shares) | 41,268 | 39,691 | |
Common stock repurchased and retired | (623,412) | ||
Balance at the end of the year (in shares) | 68,608,508 | 67,341,316 | 66,742,490 |
Common Stock Par Value | Stock Awards Plans | |||
Common stock and treasury stock and the share activity | |||
Stock option exercises (in shares) | 1,079,841 | 1,182,547 | |
Common Stock Par Value | Director Stock Option Plans | |||
Common stock and treasury stock and the share activity | |||
Stock option exercises (in shares) | 146,083 | ||
Treasury Stock | |||
Common stock and treasury stock and the share activity | |||
Balance at the beginning of the year (in shares) | 4,424,884 | 4,881,889 | |
Common stock repurchased (in shares) | 778,848 | 45,000 | |
Balance at the end of the year (in shares) | 4,836,027 | 4,424,884 | 4,881,889 |
Treasury Stock | Stock Awards Plans | |||
Common stock and treasury stock and the share activity | |||
Stock option exercises (in shares) | (367,705) | (502,005) |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
STOCK-BASED COMPENSATION | |||
Proceeds from stock option exercises | $ 90,834 | $ 88,156 | $ 73,905 |
Stock options | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 3 years | ||
Expiration period | 10 years | ||
Compensation expense | $ 5,700 | 10,900 | 15,200 |
Compensation expense, net of tax | 4,500 | 8,400 | 10,500 |
Fair value of shares vested | 17,500 | 16,500 | 16,900 |
Proceeds from stock option exercises | 90,200 | ||
Actual tax benefit realized for the tax deduction from option exercises | 19,500 | ||
Unrecognized compensation cost expected to be recognized in future periods | $ 2,300 | ||
Weighted-average period over which compensation cost is expected to be recognized | 1 year | ||
Stock options | Selling, research & development and administrative expenses | |||
STOCK-BASED COMPENSATION | |||
Compensation expense | $ 4,800 | 8,700 | 13,200 |
Restricted stock units | |||
STOCK-BASED COMPENSATION | |||
Compensation expense | 18,200 | 8,700 | 3,700 |
Actual tax benefit realized for the tax deduction from option exercises | 1,000 | ||
Unrecognized compensation cost expected to be recognized in future periods | $ 28,900 | ||
Weighted-average period over which compensation cost is expected to be recognized | 2 years 10 months 24 days | ||
Weighted-Average Grant-Date Fair Value | |||
Fair value of units vested | $ 4,600 | 3,000 | 4,700 |
Intrinsic value of units vested | $ 5,400 | $ 3,700 | $ 5,200 |
Restricted stock units (time-based) | |||
Restricted stock unit activity | |||
Balance at the beginning of the period (in shares) | 261,487 | ||
Granted (in shares) | 295,412 | ||
Vested (in shares) | (51,433) | ||
Forfeited (in shares) | (24,737) | ||
Balance at the end of the period (in shares) | 480,729 | 261,487 | |
Weighted-Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 91.78 | ||
Granted (in dollars per share) | 97.80 | ||
Vested (in dollars per share) | 88.77 | ||
Forfeited (in dollars per share) | 98.72 | ||
Nonvested at the end of the period (in dollars per share) | $ 95.45 | $ 91.78 | |
Stock Awards Plans | Stock options | |||
STOCK-BASED COMPENSATION | |||
Weighted-average fair value of stock options granted (in dollars per share) | $ 14.82 | $ 11.86 | |
Assumptions used to estimate fair value of stock options granted | |||
Dividend Yield (as a percent) | 1.50% | 1.70% | |
Expected Stock Price Volatility (as a percent) | 14.20% | 15.80% | |
Risk-free Interest Rate (as a percent) | 2.80% | 2.20% | |
Expected Life of Option (years) | 6 years 7 months 6 days | 6 years 8 months 12 days | |
Stock options activity | |||
Outstanding at the beginning of the period (in shares) | 6,761,055 | ||
Exercised (in shares) | (1,560,047) | ||
Forfeited or expired (in shares) | (156,828) | ||
Outstanding at the end of the period (in shares) | 5,044,180 | 6,761,055 | |
Exercisable at the end of the period (in shares) | 4,288,542 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 65.76 | ||
Exercised (in dollars per share) | 57.10 | ||
Forfeited or expired (in dollars per share) | 73.15 | ||
Outstanding at the end of the period (in dollars per share) | 68.32 | $ 65.76 | |
Exercisable at the end of the period (in dollars per share) | $ 66.01 | ||
Weighted-Average Remaining Contractual Term (Years): | |||
Outstanding at the end of the period | 5 years 4 months 24 days | ||
Exercisable at the end of the period | 5 years | ||
Aggregate Intrinsic Value: | |||
Outstanding at the end of the period | $ 239,033 | ||
Exercisable at the end of the period | 212,745 | ||
Intrinsic Value of Options Exercised | $ 87,251 | $ 72,951 | $ 51,140 |
Assumptions used to estimate fair value of restricted stock units granted | |||
Expected Stock Price Volatility (as a percent) | 14.20% | 15.80% | |
Risk-free Interest Rate (as a percent) | 2.80% | 2.20% | |
Dividend Yield (as a percent) | 1.50% | 1.70% | |
Stock Awards Plans | Restricted stock units (time-based) | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 3 years | ||
Stock Awards Plans | Restricted stock units (performance-based) | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 3 years | ||
Assumptions used to estimate fair value of stock options granted | |||
Dividend Yield (as a percent) | 1.30% | 1.43% | |
Expected Stock Price Volatility (as a percent) | 16.50% | 12.30% | |
Risk-free Interest Rate (as a percent) | 2.19% | 2.42% | |
Assumptions used to estimate fair value of restricted stock units granted | |||
Fair value per stock award (in dollars per share) | $ 134.97 | $ 128.70 | |
Grant date stock price (in dollars per share) | $ 104.51 | $ 89.42 | |
Expected Stock Price Volatility (as a percent) | 16.50% | 12.30% | |
Expected average volatility of peer companies (as a percent) | 31.90% | 27.50% | |
Correlation assumption (as a percent) | 37.40% | 20.20% | |
Risk-free Interest Rate (as a percent) | 2.19% | 2.42% | |
Dividend Yield (as a percent) | 1.30% | 1.43% | |
Restricted stock unit activity | |||
Balance at the beginning of the period (in shares) | 69,990 | ||
Granted (in shares) | 123,246 | ||
Forfeited (in shares) | (11,556) | ||
Balance at the end of the period (in shares) | 181,680 | 69,990 | |
Weighted-Average Grant-Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 111.55 | ||
Granted (in dollars per share) | 119.35 | ||
Forfeited (in dollars per share) | 117.04 | ||
Nonvested at the end of the period (in dollars per share) | $ 117.26 | $ 111.55 | |
Director Stock Option Plans | Stock options | |||
Stock options activity | |||
Outstanding at the beginning of the period (in shares) | 155,200 | ||
Exercised (in shares) | (19,949) | ||
Outstanding at the end of the period (in shares) | 135,251 | 155,200 | |
Exercisable at the end of the period (in shares) | 135,251 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 58.13 | ||
Exercised (in dollars per share) | 55.99 | ||
Outstanding at the end of the period (in dollars per share) | 58.45 | $ 58.13 | |
Exercisable at the end of the period (in dollars per share) | $ 58.45 | ||
Weighted-Average Remaining Contractual Term (Years): | |||
Outstanding at the end of the period | 3 years 2 months 12 days | ||
Exercisable at the end of the period | 3 years 2 months 12 days | ||
Aggregate Intrinsic Value: | |||
Outstanding at the end of the period | $ 7,732 | ||
Exercisable at the end of the period | 7,732 | ||
Intrinsic Value of Options Exercised | $ 1,172 | $ 2,286 | $ 1,995 |
Director Stock Option Plans | Restricted stock units | |||
STOCK-BASED COMPENSATION | |||
Award vesting period | 1 year | ||
Director Stock Option Plans | Restricted stock units (time-based) | |||
Restricted stock unit activity | |||
Granted (in shares) | 11,490 | ||
Vested (in shares) | (14,257) | ||
New long-term incentive program | |||
STOCK-BASED COMPENSATION | |||
Compensation expense | $ 800 | $ 1,200 | $ (700) |
Performance period used to measure cumulative total shareholder return of common stock | 3 years | ||
Expected total expense related to program over the performance period | $ 2,700 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earning per share | |||||||||||
Authorized common stock (in shares) | 199,000 | 199,000 | 199,000 | 199,000 | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Income (Numerator) | |||||||||||
Income available to common stockholders, basic (in dollars) | $ 48,533 | $ 56,750 | $ 73,915 | $ 63,004 | $ 40,674 | $ 38,996 | $ 55,775 | $ 59,300 | $ 242,202 | $ 194,745 | $ 220,030 |
Income available to common stockholders, diluted (in dollars) | $ 242,202 | $ 194,745 | $ 220,030 | ||||||||
Shares (Denominator) | |||||||||||
Basic (in shares) | 63,835 | 64,010 | 63,471 | 62,964 | 62,834 | 62,378 | 62,402 | 62,128 | 63,574 | 62,437 | 62,435 |
Total average equivalent shares | 66,192 | 66,702 | 66,232 | 65,349 | 65,344 | 65,129 | 64,850 | 64,414 | 66,150 | 64,958 | 64,596 |
Per Share Amount | |||||||||||
Net income per share, basic (in dollars per share) | $ 0.76 | $ 0.89 | $ 1.16 | $ 1 | $ 0.65 | $ 0.63 | $ 0.89 | $ 0.95 | $ 3.81 | $ 3.12 | $ 3.52 |
Net income per share, diluted (in dollars per share) | $ 0.73 | $ 0.85 | $ 1.12 | $ 0.96 | $ 0.62 | $ 0.60 | $ 0.86 | $ 0.92 | $ 3.66 | $ 3 | $ 3.41 |
Stock options | |||||||||||
Shares (Denominator) | |||||||||||
Effect of dilutive stock based compensation (in shares) | 2,344 | 2,440 | 2,106 | ||||||||
Restricted stock units | |||||||||||
Shares (Denominator) | |||||||||||
Effect of dilutive stock based compensation (in shares) | 232 | 81 | 55 |
SEGMENT INFORMATION (Summary of
SEGMENT INFORMATION (Summary of Reportable Segments) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Financial information regarding the Company's reportable segments | |||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Net sales | $ 671,333 | $ 701,278 | $ 742,661 | $ 744,460 | $ 685,028 | $ 665,775 | $ 710,608 | $ 703,350 | $ 2,859,732 | $ 2,764,761 | $ 2,469,283 |
Acquisition related costs | 3,927 | 23,770 | |||||||||
Total Restructuring Initiatives | 20,472 | 63,829 | 2,208 | ||||||||
Gain on insurance recovery | 10,648 | ||||||||||
Depreciation and amortization | 194,552 | 171,747 | 153,094 | ||||||||
Interest expense | (35,489) | (32,626) | (40,597) | ||||||||
Interest income | 4,174 | 7,056 | 5,470 | ||||||||
Income before Income Taxes | 342,069 | 266,020 | 294,825 | ||||||||
Capital Expenditures | 242,276 | 211,252 | 156,624 | ||||||||
Total Assets | 3,562,119 | 3,377,735 | 3,562,119 | 3,377,735 | 3,137,823 | ||||||
Business Transformation | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Total Restructuring Initiatives | 20,472 | 63,829 | 2,208 | ||||||||
Capital Expenditures | 38,000 | ||||||||||
Business Transformation | Employee severance | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Total Restructuring Initiatives | 8,104 | ||||||||||
Beauty + Home | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 1,352,714 | 1,426,382 | 1,313,786 | ||||||||
Adjusted EBITDA | 181,150 | 185,926 | 173,227 | ||||||||
Total Restructuring Initiatives | 17,682 | 52,244 | 529 | ||||||||
Depreciation and amortization | 82,778 | 83,546 | 79,422 | ||||||||
Capital Expenditures | 96,040 | 101,371 | 76,425 | ||||||||
Total Assets | 1,378,292 | 1,373,816 | 1,378,292 | 1,373,816 | 1,358,283 | ||||||
Pharma | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 1,091,051 | 954,652 | 805,880 | ||||||||
Adjusted EBITDA | 387,483 | 343,706 | 275,933 | ||||||||
Total Restructuring Initiatives | 632 | 3,589 | |||||||||
Depreciation and amortization | 65,590 | 51,495 | 41,143 | ||||||||
Capital Expenditures | 89,702 | 54,433 | 33,005 | ||||||||
Total Assets | 1,422,815 | 1,324,696 | 1,422,815 | 1,324,696 | 881,443 | ||||||
Food + Beverage | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 415,967 | 383,727 | 349,617 | ||||||||
Adjusted EBITDA | 68,108 | 57,589 | 62,903 | ||||||||
Total Restructuring Initiatives | 391 | 4,185 | 1,679 | ||||||||
Depreciation and amortization | 35,728 | 27,467 | 24,720 | ||||||||
Capital Expenditures | 45,130 | 41,236 | 38,730 | ||||||||
Total Assets | 534,527 | 501,700 | 534,527 | 501,700 | 296,271 | ||||||
Corporate & Other | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Adjusted EBITDA | (44,406) | (36,285) | (37,457) | ||||||||
Total Restructuring Initiatives | 1,767 | 3,811 | |||||||||
Depreciation and amortization | 10,456 | 9,239 | 7,809 | ||||||||
Capital Expenditures | 13,933 | 25,739 | 18,924 | ||||||||
Transfer of Corporate Technology Expenditures | (2,529) | (11,527) | (10,460) | ||||||||
Total Assets | $ 226,485 | $ 177,523 | 226,485 | 177,523 | 601,826 | ||||||
Operating segment | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 2,894,507 | 2,787,989 | 2,491,444 | ||||||||
Operating segment | Beauty + Home | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 1,376,027 | 1,446,231 | 1,333,048 | ||||||||
Operating segment | Pharma | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 1,100,463 | 955,069 | 805,913 | ||||||||
Operating segment | Food + Beverage | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | 418,017 | 386,689 | 352,483 | ||||||||
Intersegment | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | (34,775) | (23,228) | (22,161) | ||||||||
Intersegment | Beauty + Home | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | (23,313) | (19,849) | (19,262) | ||||||||
Intersegment | Pharma | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | (9,412) | (417) | (33) | ||||||||
Intersegment | Food + Beverage | |||||||||||
Financial information regarding the Company's reportable segments | |||||||||||
Net sales | $ (2,050) | $ (2,962) | $ (2,866) |
SEGMENT INFORMATION (Summary _2
SEGMENT INFORMATION (Summary of Net Sales and Long-Lived Assets By Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | $ 671,333 | $ 701,278 | $ 742,661 | $ 744,460 | $ 685,028 | $ 665,775 | $ 710,608 | $ 703,350 | $ 2,859,732 | $ 2,764,761 | $ 2,469,283 | |
Plant, Property & Equipment | 1,087,678 | 991,613 | $ 1,087,678 | $ 991,613 | $ 867,906 | $ 997,489 | ||||||
Customer Concentration Risk | Net sales | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Concentration Risk, Percentage | 6.00% | 6.00% | 6.00% | |||||||||
United States | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | $ 836,768 | $ 726,336 | $ 642,164 | |||||||||
Plant, Property & Equipment | 300,820 | 265,004 | 300,820 | 265,004 | 182,434 | |||||||
Europe | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 1,638,469 | 1,627,478 | 1,426,173 | |||||||||
Plant, Property & Equipment | 619,268 | 577,144 | 619,268 | 577,144 | 547,795 | |||||||
France | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 895,110 | 862,364 | 744,856 | |||||||||
Plant, Property & Equipment | 338,288 | 308,250 | 338,288 | 308,250 | 266,804 | |||||||
Germany | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 452,409 | 474,369 | 416,802 | |||||||||
Plant, Property & Equipment | 163,782 | 154,505 | 163,782 | 154,505 | 163,948 | |||||||
Italy | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 141,867 | 144,044 | 131,523 | |||||||||
Plant, Property & Equipment | 53,562 | 54,978 | 53,562 | 54,978 | 57,080 | |||||||
Other Europe | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 149,083 | 146,701 | 132,992 | |||||||||
Plant, Property & Equipment | 63,636 | 59,411 | 63,636 | 59,411 | 59,963 | |||||||
Other Foreign Countries | ||||||||||||
Net sales and long-lived asset information by geographic area | ||||||||||||
Net sales | 384,495 | 410,947 | 400,946 | |||||||||
Plant, Property & Equipment | $ 167,590 | $ 149,465 | $ 167,590 | $ 149,465 | $ 137,677 |
INSURANCE SETTLEMENT RECEIVAB_2
INSURANCE SETTLEMENT RECEIVABLE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INSURANCE SETTLEMENT RECEIVABLE | |||
Gain on insurance recovery | $ 10,648 | ||
France | Fire damage | |||
INSURANCE SETTLEMENT RECEIVABLE | |||
Insurance proceeds received | $ 3,400 | ||
Costs incurred related to fire | $ 18,900 | 20,300 | |
Insurance receivable | $ 0 | ||
Expenses related to fire | 5,800 | ||
Beauty + Home | France | Fire damage | |||
INSURANCE SETTLEMENT RECEIVABLE | |||
Expenses related to fire | 3,800 | 5,600 | |
Gain on insurance recovery | $ 10,600 | ||
Pharma | France | Fire damage | |||
INSURANCE SETTLEMENT RECEIVABLE | |||
Expenses related to fire | $ 2,000 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | Oct. 31, 2019USD ($) | Oct. 01, 2019 | Aug. 02, 2019USD ($) | Jun. 05, 2019USD ($) | May 31, 2019USD ($) | Aug. 27, 2018USD ($) | May 01, 2018USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Feb. 13, 2020 | Jan. 01, 2020USD ($) | Aug. 31, 2019USD ($)item | May 31, 2018USD ($) |
Acquisitions | ||||||||||||||||
Investment in unconsolidated affiliate | $ 3,530 | $ 10,000 | $ 5,000 | |||||||||||||
Acquisition of business, net of cash received | 106,328 | 527,916 | ||||||||||||||
Proceeds from sale of investment in equity securities | 16,487 | |||||||||||||||
Acquisition related costs | 3,927 | 23,770 | ||||||||||||||
Restricted cash included in prepaid and other | $ 5,000 | 5,003 | 5,000 | |||||||||||||
Assets | ||||||||||||||||
Goodwill | 712,095 | 763,461 | 712,095 | $ 443,887 | ||||||||||||
Preferred equity stocks | ||||||||||||||||
Acquisitions | ||||||||||||||||
Cost method investments | $ 3,500 | |||||||||||||||
Number of preferred equity investments | item | 2 | |||||||||||||||
Investment in preferred equity stock | $ 10,000 | |||||||||||||||
Proceeds from sale of investment in equity securities | $ 16,500 | |||||||||||||||
Gain on sale of equity method investment | $ 6,500 | |||||||||||||||
Carrying amount adjustments related to fair value adjustments | ||||||||||||||||
Investment impairment | $ 0 | |||||||||||||||
Bapco | ||||||||||||||||
Acquisitions | ||||||||||||||||
Ownership interest previously held | 20.00% | 20.00% | ||||||||||||||
Fusion Packaging | Subsequent Events | ||||||||||||||||
Acquisitions | ||||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||||
BTY | Subsequent Events | ||||||||||||||||
Acquisitions | ||||||||||||||||
Ownership percentage of equity method investment | 49.00% | |||||||||||||||
Investment in preferred equity stock | $ 32,000 | |||||||||||||||
BTY | Strategic Definitive Agreement | ||||||||||||||||
Acquisitions | ||||||||||||||||
Ownership percentage of equity method investment | 49.00% | |||||||||||||||
Initial lock-up period | 5 years | |||||||||||||||
Second lock-up period | 3 years | |||||||||||||||
BTY | Strategic Definitive Agreement | Call Option | Minimum | ||||||||||||||||
Acquisitions | ||||||||||||||||
Ownership percentage of equity method investment | 26.00% | |||||||||||||||
BTY | Strategic Definitive Agreement | Call Option | Maximum | ||||||||||||||||
Acquisitions | ||||||||||||||||
Ownership percentage of equity method investment | 31.00% | |||||||||||||||
2019 Acquisitions | ||||||||||||||||
Acquisitions | ||||||||||||||||
Acquisition related costs | 3,400 | |||||||||||||||
Goodwill expected to be tax deductible | 29,600 | |||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | 3,427 | |||||||||||||||
Accounts receivable | 3,504 | |||||||||||||||
Prepaid and other | 2,478 | |||||||||||||||
Property, plant and equipment | 4,267 | |||||||||||||||
Goodwill | 59,143 | |||||||||||||||
Intangible assets | 52,980 | |||||||||||||||
Other miscellaneous assets | 430 | |||||||||||||||
Liabilities | ||||||||||||||||
Accounts payable, accrued and other liabilities | 5,388 | |||||||||||||||
Deferred income taxes | 2,592 | |||||||||||||||
Deferred and other non-current liabilities | 1,598 | |||||||||||||||
Net assets acquired | 116,651 | |||||||||||||||
2019 Acquisitions | Pharma | ||||||||||||||||
Assets | ||||||||||||||||
Goodwill | 59,100 | |||||||||||||||
Noble | ||||||||||||||||
Acquisitions | ||||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||||
Acquisition of business, net of cash received | $ 62,300 | |||||||||||||||
Fair value of contingent consideration arrangement | 2,900 | 2,900 | ||||||||||||||
Restricted cash included in prepaid and other | 5,000 | |||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | $ 1,600 | |||||||||||||||
Gateway Analytical | ||||||||||||||||
Acquisitions | ||||||||||||||||
Cost of acquired entity | $ 7,000 | |||||||||||||||
Fair value of contingent consideration arrangement | $ 3,000 | $ 3,000 | ||||||||||||||
Nanopharm | ||||||||||||||||
Acquisitions | ||||||||||||||||
Acquisition of business, net of cash received | $ 38,100 | |||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | $ 1,800 | |||||||||||||||
Reboul | ||||||||||||||||
Acquisitions | ||||||||||||||||
Percentage of interest acquired | 100.00% | |||||||||||||||
Cost of acquired entity | $ 3,500 | |||||||||||||||
Fair value of contingent consideration arrangement | $ 0 | $ 0 | ||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | $ 112 | |||||||||||||||
Bapco | ||||||||||||||||
Acquisitions | ||||||||||||||||
Percentage of interest acquired | 80.00% | |||||||||||||||
Acquisition of business, net of cash received | $ 3,800 | |||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | $ 2,900 | |||||||||||||||
CSP Technologies | ||||||||||||||||
Acquisitions | ||||||||||||||||
Cost of acquired entity | $ 553,500 | |||||||||||||||
Sales of acquiree during the reporting period | 48,900 | |||||||||||||||
Pretax income of acquiree during the reporting period | (10,200) | |||||||||||||||
Acquisition related costs | 9,000 | |||||||||||||||
Nonrecurring expense related to the fair value adjustment to acquisition-date inventory (before tax) | 14,100 | |||||||||||||||
Restricted cash included in prepaid and other | 5,000 | 5,000 | ||||||||||||||
Refund from working capital adjustment | $ 1,000 | |||||||||||||||
Assets | ||||||||||||||||
Cash and equivalents | 24,053 | 24,053 | ||||||||||||||
Accounts receivable | 20,847 | 20,847 | ||||||||||||||
Inventories | 42,169 | 42,169 | ||||||||||||||
Prepaid and other | 3,995 | 3,995 | ||||||||||||||
Property, plant and equipment | 99,194 | 99,194 | ||||||||||||||
Goodwill | 278,020 | 278,020 | ||||||||||||||
Intangible assets | 177,120 | 177,120 | ||||||||||||||
Other miscellaneous assets | 1,039 | 1,039 | ||||||||||||||
Liabilities | ||||||||||||||||
Current maturities of long-term obligations | 129 | 129 | ||||||||||||||
Accounts payable, accrued and other liabilities | 31,989 | 31,989 | ||||||||||||||
Long-term obligations | 6,037 | 6,037 | ||||||||||||||
Deferred income taxes | 38,442 | 38,442 | ||||||||||||||
Retirement and deferred compensation plans | 1,038 | 1,038 | ||||||||||||||
Deferred and other non-current liabilities | 15,344 | 15,344 | ||||||||||||||
Net assets acquired | 553,458 | 553,458 | ||||||||||||||
CSP Technologies | Pharma | ||||||||||||||||
Acquisitions | ||||||||||||||||
Sales of acquiree during the reporting period | 33,900 | |||||||||||||||
Pretax income of acquiree during the reporting period | (10,300) | |||||||||||||||
Assets | ||||||||||||||||
Goodwill | 174,300 | 174,300 | ||||||||||||||
CSP Technologies | Food + Beverage | ||||||||||||||||
Acquisitions | ||||||||||||||||
Sales of acquiree during the reporting period | 15,000 | |||||||||||||||
Pretax income of acquiree during the reporting period | 100 | |||||||||||||||
Assets | ||||||||||||||||
Goodwill | $ 103,700 | $ 103,700 |
ACQUISITIONS (Acquired Intangib
ACQUISITIONS (Acquired Intangibles) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CSP Technologies | ||
Acquired finite-lived intangible assets | ||
Estimated Fair Value of Asset | $ 177,120 | |
CSP Technologies | Acquired technology | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 12 years | |
Estimated Fair Value of Asset | $ 46,700 | |
CSP Technologies | Customer relationships | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 16 years | |
Estimated Fair Value of Asset | $ 113,300 | |
CSP Technologies | Trademarks and trade names | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 9 years | |
Estimated Fair Value of Asset | $ 14,600 | |
CSP Technologies | License agreements and other | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 11 years | |
Estimated Fair Value of Asset | $ 2,520 | |
2019 Acquisitions | ||
Acquired finite-lived intangible assets | ||
Estimated Fair Value of Asset | $ 52,980 | |
2019 Acquisitions | Acquired technology | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 8 years | |
Estimated Fair Value of Asset | $ 9,160 | |
2019 Acquisitions | Customer relationships | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 11 years | |
Estimated Fair Value of Asset | $ 39,379 | |
2019 Acquisitions | Trademarks and trade names | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 4 years | |
Estimated Fair Value of Asset | $ 2,457 | |
2019 Acquisitions | License agreements and other | ||
Acquired finite-lived intangible assets | ||
Weighted average useful life | 1 year | |
Estimated Fair Value of Asset | $ 1,984 |
ACQUISITIONS (Pro Forma) (Detai
ACQUISITIONS (Pro Forma) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unaudited pro forma financial information | ||
Net Sales | $ 2,857,765 | $ 2,605,095 |
Net Income Attributable to AptarGroup, Inc. | $ 208,717 | $ 230,753 |
Net Income per common share - basic | $ 3.34 | $ 3.70 |
Net Income per common share - diluted | $ 3.21 | $ 3.57 |
CSP Technologies | Acquisition Related Costs | ||
Acquisitions | ||
Transaction costs excluded from supplemental pro forma earnings (after tax) | $ 16,700 | |
Transaction costs excluded from supplemental pro forma earnings (before tax) | 22,000 | |
CSP Technologies | Fair Value Adjustment | ||
Acquisitions | ||
Nonrecurring expense related to the fair value adjustment to acquisition-date inventory excluded from supplemental pro forma earnings (after tax) | 10,900 | |
Nonrecurring expense related to the fair value adjustment to acquisition-date inventory excluded from supplemental pro form earnings (before tax) | $ 14,100 |
RESTRUCTURING INITIATIVE (Detai
RESTRUCTURING INITIATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring initiatives | |||
Capital Expenditures | $ 242,276 | $ 211,252 | $ 156,624 |
Restructuring reserve | |||
Expense recognized related to the plan | 20,472 | 63,829 | 2,208 |
Business Transformation | |||
Restructuring initiatives | |||
Expected implementation costs | 110,000 | ||
Expected capital investments related to transformation plan | 55,000 | ||
Cumulative expense incurred | 86,500 | ||
Capital Expenditures | 38,000 | ||
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 15,035 | ||
Expense recognized related to the plan | 20,472 | 63,829 | 2,208 |
Cash paid | (24,608) | ||
FX impact | (200) | ||
Restructuring reserve, balance at the end of the period | 10,699 | 15,035 | |
Business Transformation | Employee severance | |||
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 3,934 | ||
Expense recognized related to the plan | 8,104 | ||
Cash paid | (4,813) | ||
FX impact | (135) | ||
Restructuring reserve, balance at the end of the period | 7,090 | 3,934 | |
Business Transformation | Professional fees and other costs | |||
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 11,101 | ||
Expense recognized related to the plan | 12,368 | ||
Cash paid | (19,795) | ||
FX impact | (65) | ||
Restructuring reserve, balance at the end of the period | 3,609 | 11,101 | |
Beauty + Home | |||
Restructuring initiatives | |||
Capital Expenditures | 96,040 | 101,371 | 76,425 |
Restructuring reserve | |||
Expense recognized related to the plan | 17,682 | 52,244 | 529 |
Pharma | |||
Restructuring initiatives | |||
Capital Expenditures | 89,702 | 54,433 | 33,005 |
Restructuring reserve | |||
Expense recognized related to the plan | 632 | 3,589 | |
Food + Beverage | |||
Restructuring initiatives | |||
Capital Expenditures | 45,130 | 41,236 | 38,730 |
Restructuring reserve | |||
Expense recognized related to the plan | 391 | 4,185 | 1,679 |
Corporate & Other | |||
Restructuring initiatives | |||
Capital Expenditures | 13,933 | 25,739 | $ 18,924 |
Restructuring reserve | |||
Expense recognized related to the plan | $ 1,767 | $ 3,811 |
QUARTERLY DATA (UNAUDITED) (Det
QUARTERLY DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
QUARTERLY DATA (UNAUDITED) | |||||||||||
Net sales | $ 671,333 | $ 701,278 | $ 742,661 | $ 744,460 | $ 685,028 | $ 665,775 | $ 710,608 | $ 703,350 | $ 2,859,732 | $ 2,764,761 | $ 2,469,283 |
Gross profit | 193,588 | 215,222 | 231,739 | 233,841 | 184,775 | 192,544 | 209,018 | 209,171 | 874,390 | 795,508 | |
Net Income | 48,538 | 56,769 | 73,921 | 62,999 | 40,675 | 39,022 | 55,781 | 59,288 | 242,227 | 194,766 | 220,029 |
Net Income Attributable to AptarGroup, Inc. | $ 48,533 | $ 56,750 | $ 73,915 | $ 63,004 | $ 40,674 | $ 38,996 | $ 55,775 | $ 59,300 | $ 242,202 | $ 194,745 | $ 220,030 |
Net Income Attributable to AptarGroup, Inc. Per Common Share: | |||||||||||
Basic (in dollars per share) | $ 0.76 | $ 0.89 | $ 1.16 | $ 1 | $ 0.65 | $ 0.63 | $ 0.89 | $ 0.95 | $ 3.81 | $ 3.12 | $ 3.52 |
Diluted (in dollars per share) | $ 0.73 | $ 0.85 | $ 1.12 | $ 0.96 | $ 0.62 | $ 0.60 | $ 0.86 | $ 0.92 | $ 3.66 | $ 3 | $ 3.41 |
Average number of shares outstanding: | |||||||||||
Basic (in shares) | 63,835 | 64,010 | 63,471 | 62,964 | 62,834 | 62,378 | 62,402 | 62,128 | 63,574 | 62,437 | 62,435 |
Diluted (in shares) | 66,192 | 66,702 | 66,232 | 65,349 | 65,344 | 65,129 | 64,850 | 64,414 | 66,150 | 64,958 | 64,596 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Events - USD ($) $ in Millions | Feb. 13, 2020 | Jan. 01, 2020 |
Fusion Packaging | ||
Subsequent Event [Line Items] | ||
Percentage of interest acquired | 100.00% | |
BTY | ||
Subsequent Event [Line Items] | ||
Investment in preferred equity stock | $ 32 | |
Ownership percentage of equity method investment | 49.00% |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts | |||
VALUATION AND QUALIFYING ACCOUNTS | |||
Balance at the Beginning of the Period | $ 3,541 | $ 3,161 | $ 2,989 |
Charged to Costs and Expenses | 782 | 923 | 235 |
Deductions from Reserve | (697) | (543) | (63) |
Balance at the End of the Period | 3,626 | 3,541 | 3,161 |
Deferred tax valuation allowance | |||
VALUATION AND QUALIFYING ACCOUNTS | |||
Balance at the Beginning of the Period | 11,189 | 5,414 | 4,070 |
Charged to Costs and Expenses | 12,058 | 4,230 | 3,640 |
Charged to Other Accounts | 1,508 | 2,604 | |
Deductions from Reserve | (1,435) | (1,059) | (2,296) |
Balance at the End of the Period | $ 23,320 | $ 11,189 | $ 5,414 |